Inquiry into the Australian Legal Aid System

Community legal centres

2.56 Community legal centres target their services to the most socially disadvantaged in the Australian community. Typically these people may otherwise be “excluded” from the legal system by social, cultural, language, economic or geographical barriers. Community legal centres are able to offer services which break down barriers through particular features of community legal centre legal service delivery such as informality, accessibility and understanding of and empathy with clients' particular legal needs. Community legal centres may offer the only recourse to the legal system for people who are not poor enough to qualify for legal aid commission assistance but not rich enough to take advantage of private firms.

2.57 In Western Australia, the Committee heard in camera evidence from two women who each had a desperate need for legal assistance, but who did not meet the guidelines being applied by the legal aid commission. Each of these women was being assisted by a community legal centre, and each was extremely grateful for the work being undertaken on their behalf.

2.58 The vast majority of community legal centres provide advice over a wide spectrum of legal issues (apart from matters such as conveyancing). The major resource allocation is to community legal casework. Community legal centres also devote time and energy to community legal education activities which provide a “preventive law” role, to policy development and advocating for law reform. Where a service user seeks advice or assistance concerning a matter handled by an available specialist community legal centre or other Government agency a referral will be made to that service.

2.59 The outcomes achieved from funding legal services through community legal centres are “leveraged” by the contributions of volunteers. Volunteers may be lawyers doing pro bono work, people with other skills such as counselling or experience or aptitude in reaching particular community groups. Students also make a significant contribution to the work undertaken by community legal centres. For every paid staff member of a community legal centre, there are significant numbers of volunteers and students who are able to provide support above and beyond the actual purchasing power of the funding provided.

2.60 In relation to community legal centres, Mr Michael Cramsie of National Legal Aid told the Committee that "what makes the community legal centres attractive to everybody, including governments, is that from the government's point of view, and in sheer economic terms, they all come with a substantial voluntary input and therefore a free or pro bono input." [42]

Funding

2.61 In 1995-96 the Commonwealth Government provided $14.918m in recurrent funding to community legal centres across Australia through the Commonwealth Community Legal Centre Program. The Committee notes that Commonwealth, State and Territory program funding has increased (in 1989-90, Commonwealth funding was $2.5 million) as the benefits of community based legal services have been recognised by the Government.

2.62 Funding to community legal centres is also provided by some State and Territory Governments. However, the Commonwealth is the major provider of government funding. Community legal centres actively seek funds from other sources such as donations or one-off funding for project work.

Contribution of innovation, research and development

2.63 The Committee has received a lot of evidence that legal aid commissions and community legal centres are constantly seeking new approaches to the organisation and delivery of services with a view to reducing costs and providing a greater level of service. The Committee has also heard that funding to support innovation, research and development is not readily available at a national level. Mr Ted Wright of the Justice Research Centre in Sydney provided extensive evidence to the Committee about research being undertaken by his organisation which is a project of the New South Wales Law Foundation. Much of the research that his organisation is involved with has national application and implications, but Commonwealth funding is not generally available to support it. One example of the sort of research which is relevant was provided by Mr Wright.

I would like to report that we are undertaking a large research project on the cost effectiveness of some of the major process reforms of recent times. I am speaking now of case management civil process reforms that are being implemented around the country. The issue is still unanswered as to whether those reforms are in fact effective and, in particular, whether they are cost effective. The urgency for such research has been heightened by the recent release of a report prepared by the Rand Institute for Civil Justice in the United States, which is a report of a four-year evaluation of similar reforms in the American context. In a nutshell, those are spectacularly disappointing in that they suggest that many of these reforms, while they are effective in addressing delay, add cost and that, most notably, the reform on which many people are hanging all their hopes and prayers – alternative dispute resolution – is singularly ineffective in reducing either cost or delay. [43]

2.64 The National Association of Community Legal Centres explained that, because of the constrained funding climate, innovations for the future are displaced by immediate issues. This is understandable but may lead to the continuation of less efficient practices or the application of inappropriate priorities. Evidence suggests that it would be worthwhile quarantining funds specifically for research and development.

There is very little research and development of legal aid being undertaken at a national level. What there is seems mainly to respond to perceived immediate problems rather than looking more broadly at techniques to improve the operation of the legal aid system. One of the reasons is that the research and development function is not separately managed from the day to administration of the legal aid programs. As a result the priorities are set having regard to immediate problems, and there have been many instances of projects being put on the back burner for considerable periods of time as resources are needed in other areas. [44]

2.65 Examination of the work of community legal centres shows that, a preventative approach based on community input and sound research successfully identifies innovative and appropriate responses to access to justice problems. Evidence was provided to the Committee about the value of the Community Legal Education Register which contains over 500 entries, and which was a joint initiative of community legal centres, legal aid commissions and Legal Aid and Family Services Division of the Attorney-General's Department. [45]

2.66 In its submission to the inquiry, the National Association of Community Legal Centres articulates the views expressed by a number of witnesses about the importance of facilitating research and development, particularly in an environment of high demand and reduced resources.

The funding for this critical research and development work ought to be managed separately from the government function of legal aid service delivery. NACLC suggests that a separate national legal aid research council should be established to oversee allocation and implementation of a national legal aid research and development fund, with membership of the council being drawn from the expertise that already exists in the legal aid service field. [46]

2.67 Mr Don Fleming told the Committee that the Australian legal aid system would benefit from more research to inform planning and development.

If you look to the experience in the rest of the world, this planning function of conducting research into the system, seeing what is required rather than this whole body of anecdotal evidence, we should be looking at the hard evidence and saying, “If we move this, these are the consequences”. This is something which the Dutch do amazingly well and the English are doing much better as they are looking at their system. We hardly do it at all and we should be doing much more of that. [47]

2.68 The Committee understands that in Great Britain, where the annual legal aid budget has reached in the order of 1.5 billion, the legal aid system is about to undergo very significant change in an attempt to manage it through a change of focus including greater use of alternative dispute resolution approaches and community legal services. This changed focus has been informed by extensive research including a major review conducted by Lord Woolf. [48]

2.69 The Committee has heard from the Attorney-General's Department that it is undertaking a study into national legal aid needs which the Department expects will help with future planning of legal aid provision in Australia. [49]

Role and contribution of the profession

2.70 Evidence to this inquiry shows that the legal profession has consistently made a substantial contribution to legal aid provision in Australia by:

• undertaking legally aided work for reduced fees, often at or below cost, and at a discounted rate even relative to basic scale rates;
• performing a range of pro bono legal work;
• providing voluntary advice in community legal centres, and other community agencies;
• assisting at no charge in the administrative aspects of legal aid provision;
• through professional bodies, providing substantial input into the development of legal aid policy; and
• undertaking a wide range of other free legal work in areas such as free interviews, duty solicitor activity, speaking presentations, assisting students in mock trials or assisting with community legal centre activities. [50]

2.71 Private practitioners undertake, and have traditionally undertaken, pro bono work for little or no fees or on a speculative basis. Mr Kerry Copley of the Queensland Bar told the Committee that "it is a matter of conscience, professional pride and ultimately seeing the traditional abuses of history where the disadvantaged are made to pay a supplement because they do not have the means. I think it is something that is ingrained". [51]

2.72 In New South Wales, for example, the Bar Association maintains a list of barristers prepared to undertake pro bono work and the Law Society of NSW has a pro bono section to assist people who do not qualify for legal aid to fund representation. Regional Law Societies provide duty solicitors for persons who do not qualify for legal aid, and they maintain and staff advice centres. The Public Interest Advocacy Centre has a “clearing house” for the same purpose. Many practitioners attend Community Legal Centres on a voluntary basis. The Law Society recognises pro bono and community achievements by solicitors with an annual award.

2.73 Mr Patrick Fair of the Law Society of New South Wales told the committee about a number of large Sydney law firms who have a policy of undertaking a substantial amount of voluntary legal work, some of which is on matters of community importance and is coordinated through the public interest law clearing house.

In particular, I have in mind a policy I am aware of at the law firm Clayton Utz which makes $1 million worth of legal services available for pro bono annually. There are other firms in the city who support a similar amount. I am not sure if they account for it as rigorously as Clayton Utz does, but I know that there are many firms who make their new, and even senior, solicitors available to community justice centres on week afternoons when they might otherwise be working. [52]

2.74 A number of the submissions to this inquiry provided evidence about the extent of pro bono and voluntary work undertaken by the profession. There is a lot of anecdotal evidence but only a sprinkling of substantive research available about the extent of the contribution made by the profession. Nevertheless it is apparent that the contribution is extensive and provides a valuable unofficial subsidy to the legal aid budget. Evidence suggests that the legal aid system in Australia relies significantly on the participation of the private legal profession.

2.75 The submission from the South Australian Law Society conservatively estimated that one million hours of completely free legal work is undertaken by South Australian practitioners and a further 220,000 hours of reduced or low-cost work is undertaken. The Law Society estimated that the value of this work represents a professional contribution in the order of $2 million per year to the community in South Australia. In the submission the Law Society stated that a "recent study has concluded that the contribution of the legal profession to the community in pro bono or legal aid work is of the order of $62 million annually". [53]

2.76 Tables 2.6 and 2.7 are the results of a survey of a sample of 210 lawyers in Adelaide, taken in 1994 which provided data on the extent of pro-bono activity of members of the South Australian Law Society. [54]

Table 2.6: Estimated total of individual South Australian Law Society members Pro Bono Involvement, 1993 – By Individuals (n = 210)

Source: South Australian Law Society

Table 2.7: Extent of Pro Bono Activity of South Australian Law Society Members 1993 – By Activity (n = 210)

Source: South Australian Law Society

2.77 The South Australian Law Society told the Committee that their survey data suggests that about 30 per cent of SA practitioners (ie about 500) give 40 hours per person per year to legal advisory services of various kinds, and that about 35 per cent provide an average of 60 hours per year to charitable groups or other organisations.

2.78 Mr Greg Mohen of the Law Access Group, which coordinates pro bono activity in Western Australia, told the Committee about the Law Access scheme. Law Access schemes, or their equivalents exist nationally, and were established five years ago arising from an initiative of the member organisations of the Law Council of Australia. The Law Council “identified a need for the various state societies to try and coordinate and encourage pro bono services because they perceived the ever-shrinking government commitment to legal aid services and that the professions needed to try and enhance the delivery of free and discounted services to those who were genuinely in need and who were falling through the legal aid net”. [55]

2.79 The Law Society of Western Australia estimates that the legal profession in that State contributes significant free services towards the legal aid system. The Society values these services at about $7 million per year. The following table sets out the details.

Table 2.8: Contribution of the Profession – Western Australia

Community legal centre ADVICE SESSIONS

23 advice services

Average 2 hours per week volunteer advice session; 50 weeks per year

Estimated Value $460,000 per annum

LAW WEEK

94.5FM radio – 3 x 2 hour shifts each day; 5 days; 3 solicitors per session

Solicitor office advice – 353 referrals – Average half an hour

Estimated Value $71,300

DIRECT ASSISTANCE TO LEGAL AID

Review Committees

8 Committees; 2 solicitors per committee; average 10 meetings per year

Average time 3.5 hours (1 hour pre-reading/2.5 hours meeting)

Estimated Value $112,000

LEGAL AID ADVICE BUREAUS

10,000 15 minute advice sessions (being approximately half of the total Legal Aid advice sessions) would be given each year by the private profession.

Estimated Value $500,000

INDIRECT ASSISTANCE TO LEGAL AID

Remands, pleas, trials and appeals in Courts where application for Aid made, but no grant given (or other payment received).

Firms which do numbers of Legal Aid cases will act pro bono in between 10 and 50% of actual grants made.

Estimated Value $550,000

PRO BONO ASSISTANCE Provided by the Western Australian LAW ACCESS PROJECT

Shop Front Lawyer Advice – average 10 per day; 20 minute sessions; 5 days per week for 48 weeks per year; @ $185.00 per hour

Estimated Value $148,000

ADVICE AND ASSISTANCE PROVIDED BY LAW ACCESS STAFF

Estimated Value $150,000

REFERRALS TO THE PROFESSION

150 various cases. Difficult to accurately estimate but would exceed $500,000.

Total $2,511,300

Anecdotal evidence suggests that Law Access only services about 10% of all pro bono litigation conducted in WA making the additional contribution of the profession potentially a further $5,000,000. Accordingly the total commitment of the profession to provision of legal services to those who cannot afford such assistance exceeds $7,000,000.

This does not take into account the fact that the majority of personal injury litigation in Western Australia is undertaken by the profession on the basis of the plaintiff not being required to pay until completion of the action. In many cases the profession also carries the disbursements for such actions until completion.

Source: Submission No 161, Law Society of Western Australia, pp. 2515-16

2.80 The Law Institute of Victoria provided the inquiry with further evidence that the private legal profession makes a vital contribution to the provision of legal aid. It provided information about the impact of the legal profession's cooperation in accepting reduced fees for legally aided work. The legal profession undertakes most legal aid work for 80 per cent of the prescribed fee. Of this 28-30 per cent is a return to a solicitor with 70-72 per cent being absorbed in overheads. The evidence provided states that this contribution represents more than 66 per cent of the return a practitioner would otherwise have earned on each legal aid file. Based on Victorian Legal Aid figures for payments to the private profession for the years ended 30 June 1989, 1990 and 1991, the value of the 20 per cent fee reduction is estimated to be in excess of $27 million (1992 prices). This is broken down as follows:

• $7.627 million in 1989 (25 per cent of the reduced amount paid to the private profession in that year: $30.51 million);
• $8.973 million in 1990 ($35.895 million); and
• $10.559 million in 1991 ($42.463 million) [56].

2.81 The Law Institute of Victoria also provided evidence that, in some areas, the fees paid by the Legal Aid Commission are less than 80 per cent of the prescribed fee. The example provided is that of family law work transferred to the Magistrates Court. The net effect of the fee scales is that solicitors are paid 80 per cent of 80 per cent of the prescribed fee (that is, 64 per cent). The evidence suggests that when fees are set at this level there is a loss to the solicitor undertaking the work.

2.82 In relation to the level of payment that a practitioner can expect for representing a legally aided client, compared with that which the practitioner could receive if representing a self-funding client, Mr Sean Cousins, a practitioner from the Gold Coast, explained that the he would charge the self-funding client three or four times as much as the Queensland Legal Aid Commission would pay him. Mr Cousins told the committee that "I suppose you could say that the private payers, those in this world who are lucky enough to be able to pay, are subsidising the work that I do for all those who cannot pay". [57]

2.83 State and Commonwealth initiatives to increase competition in the legal profession, while apparently increasing the efficiency and cost-effectiveness of the legal services market, are having a negative effect on pro bono work. The Committee has heard that as the profession adjusts to increased competition and a higher level of expectation from its clients, its capacity to deliver free or reduced cost legal work significantly diminishes.

2.84 Faced with the possibility that reduced Commonwealth funding for legal aid may result in an even greater demand for the profession to provide free services, Mr Michael Baumann, Chair of the Queensland Legal Aid Commission told the inquiry:

The more likely situation will be that you will have people unrepresented. Obviously the private profession will take up some of it, because they have an ongoing philosophical commitment to protecting people's rights, but there is a financial limit to practitioners out there who are already doing it tough, in terms of how much pro bono work or spec work or community legal work they can do. The risk is either that people will not exercise their rights at all – and therefore will suffer an injustice which they ought not suffer – or that they will seek to exercise their rights themselves in an unrepresented way – with the ongoing difficulties and costs to the system which I explained before. We have pushed the private legal profession about as far as we can reasonably expect them to be pushed. [58]

2.85 Ms Susan Cohen, President of the Australian Labor Lawyers Association summed up the view, shared by some other witnesses, that the economic rationalist approach of government conflicts with the tradition of the profession's moral responsibility to discount fees, to appear pro bono or undertake voluntary work.

[T]he exigencies of the economic rationalist approach, which are entering not only into this debate here but also into so many aspects of the control of the legal profession, make that theory anathema to the idea of people appearing pro bono. The further the economic rationalist approach blinkers every decision, it cannot be expected that the voluntary nature of the free or discounted work that is done by the profession can continue. The profession is being squeezed in that instance from both sides. [59]

2.86 The evidence points to an increasingly pressured private legal profession concerned that it may not be able to maintain its current, and indeed historic, level of contribution to legal aid provision in Australia. The Committee received evidence that members of the legal profession increasingly take the view that their contributions to the legal aid system are not being appreciated by governments. This evidence suggested that, as a result, the willingness of the profession to contribute is being eroded. [60]The evidence also indicates that if this contribution is reduced or withdrawn, then the costs to Government to provide equivalent assistance to the community would be extensive.

Conclusions and Recommendation Nos: 1, 2 and 3

The Committee notes that Government initiatives throughout the past two decades, in partnership with the profession, the community and universities, have built up the Australian legal aid system as it is now known (ie up to 30 June 1997).

The Committee recognises that the goodwill, initiative and commitment of the profession has significantly contributed to the foundations of the Australian legal aid system. Further, the Committee considers that if this fact is overlooked, the stability and effectiveness of the system may be put at great risk.

The Committee is of the view that the Commonwealth Government has the primary role in ensuring equity of access and in promoting coordination, best practice and innovation in legal aid policy and programs. To perform this role successfully the Commonwealth Government is dependent upon the combined goodwill and expertise of the profession, legal service providers, State governments and academics. Accordingly, the Commonwealth Government should show leadership by engaging these parties to work alongside it, respecting the extent of expertise which is available to it.

The Committee notes that, due to the extent of the commitment of stakeholders, the legal aid dollar buys far more than the budget papers show.

If the Government, in its pursuit of control and cost cutting, alienates the profession, the functioning (albeit under-resourced) legal aid system could disintegrate, the profession may withdraw its contribution fully or in part, the cost of the system will blow out and access to legal aid will be further reduced.

To maximise the effectiveness of legal aid provision the Government must recognise and be committed to a partnership approach with the profession, the community, State and Territory governments and academia.

The Committee recommends that the Government, in cooperation with the Law Council of Australia, undertake research to determine the extent and nature of, and the motivation for, the legal profession's subsidy of legal aid provision in Australia.

The Committee further recommends that the Government formally acknowledge the contribution of the legal profession through an annual award program recognising the pro bono work undertaken by individuals and firms.

The Committee recommends that the Government, in cooperation with the Law Council of Australia, give consideration to the establishment of a new initiatives development and evaluation fund to encourage the trialing of innovative methods of providing legal information, advice and education provision by legal aid service providers. Such a fund would preferably have an out years component to enable successful and effective initiatives to continue to function, and provide incentives for sponsor involvement.

Footnotes

[42] Evidence, Mr M Cramsie, p. 218.

[43] Evidence, Mr E Wright, p. 1001.

[44] Submission No. 90, National Association of Community Legal Centres, p. 1150.

[45] The Community Legal Education Register was an initiative of the National Community Legal education Advisory Group and was established in 1994. It was updated in 1995 and a third edition issued in 1996. It is currently available on floppy disk from LAFS or NACLC. One of the outstanding issues is accessibility to this data base, with availability restricted to floppy disk being a significant impediment to its usefulness.

[46] Submission No. 90, National Association of Community Legal Centres, p. 1177.

[47] Evidence, Mr D Fleming p. 237.

[48] "Radical reform set to bail out legal aid system", The Observer, 25 May 1997, p. 5.

[49] Submission No.127, Attorney-General's Department, p. 1801.

[50] The Law Council of Australia's publication Funding Legal Aid in the '90s and the National Legal Aid publication Meeting Tomorrow's Needs on Yesterday's Budget: The Undercapacity of Legal Aid in Australia provide information about this contribution.

[51] Evidence, Mr K. Copley, p. 276.

[52] Evidence, Mr P Fair, p. 1018.

[53] Submission No. 52, Law Society of South Australia, p. 481.

[54] Submission No. 52, Law Society of South Australia, p. 480.

[55] Evidence, Mr G Mohen, p. 1128.

[56] Robert Cornall, "Legal Aid – the profession's contribution", Law Institute Journal, April 1992, p. 232.

[57] Evidence, Mr S Cousins, p. 361.

[58] Evidence, Queensland Legal Aid Commission, p. 267.

[59] Evidence, Ms S Cohen, p. 475.

[60] See for example Evidence, Law Council of Australia, p. 148.