Red Tape Lament

The Situation with Legal Aid

The Problem


Lawyers are turning off legal aid in droves. More changes lie ahead that will potentially accelerate the trend. Dame Margaret Bazley’s report of November 2009 has ironically led to more rigidity and prescription in the system. Overall, there appears to be less trust. Added to this is the fact that all the rules are taking even more administrative time with more and more things being passed over to lawyers to do.

Legal aid rates have been a continual source of concern, but in talking to my colleagues around the country, the greatest bugbear is bureaucracy rather than poor pay. Legal aid work tends to be hard anyway, with disorganised clients who have difficulty telling their stories coherently and where the volume of work (which lawyers are taking to make ends meet) is leading to trench fatigue. The more time that is spent in legal aid administration (typically 20% of a file), the less time that remains to deal with a client’s concerns and the merits of his or her case.

Financial Planning


In the family and civil areas, new requirements as to detailed verification of financial eligibility, with the responsibility really resting on the lawyer, means that applications for aid sit on lawyers’ desks for weeks while various third parties, such as Work and Income, numerous casual employers and spouses are chased to provide necessary supporting information. Meantime, case management processes require that once the lawyer has dipped his or her toe in the water, various procedural deadlines arise. Work is done for which the client has no ability to pay if legal aid is declined.

While awaiting verification of financial eligibility, the client may decide to give up or a particular dispute might be settled and then the application form is out of time under section 12 (1)(c) of the Legal Services Act. The lawyer doesn’t get paid. Or, the Agency will ask for more information about a case, perhaps relating to prospects of success. Often, this will require doing quite significant work on the merits of the case without any commitment from the Agency that the lawyer be paid. In such a case, it is best to ask for a limited grant of aid to provide an opinion as to the prospects of success. However, such grants aren’t always easy to obtain, especially in family cases.

When financial eligibility verification involves government agencies such as WINZ or ACC, the LSA should have information sharing protocols with them to allow this information to be obtained directly. The Agency has the ability to obtain such information far more efficiently and quickly than lawyers. There is some uncertainty about how much of this financial chasing around lawyers may expect to be paid for. Any grant will not bear all of this work, however, and if, in the end, the client doesn’t qualify for legal aid, then the return is zero anyway.

Increasingly, people have quite amateur trusts and companies for their small scale civil disputes that otherwise deserve legal aid. As soon as those features are present, it is a mammoth job to satisfy the Agency that the applicant is worthy of legal aid. Full trust deeds must be provided with all the gifting documentation and as far as the caveat/land charge authority, that needs to be provided in a form acceptable to the Agency. With trading trusts or companies, copies of annual returns need to be provided when often the people that apply for legal aid are ones too poor to pay their accountants to provide such information. So, while this is sought, an application form languishes and the legal aid work on the file might well exceed that 20% figure I referred to earlier.

Ever-changing Forms


Another aspect of the bureaucracy which is annoying is the number of legal aid forms that are involved and the fact that they are constantly changing. It would make sense to have one application form, irrespective of the proceeding, and there would be room for generic questions such as: “nature of the case” where a criminal lawyer could insert the criminal record numbers and the charges that are faced and a civil lawyer could insert a description of the dispute. Application forms have been returned because they are the wrong edition or the wrong type of law, with fine lines between criminal and civil at times. While waiting for the client to come to the office to sign the new form, a case may settle or the client may move on and, again, the lawyer is out of pocket.

A recent problem has been the return of invoices that were GST inclusive submitted too late when the Agency moved to a GST exclusive system, when translation ought to have been possible.

Unnecessary Estimates


Amendments to grant need to be submitted before the case is over under section 24 (1)(c), so the lawyer always has to keep his or her eye on work in progress. And, the Agency may refuse or trim such amendments weeks after the amendments were submitted and the lawyer has gone on to do the work in the expectation of being paid. A naive lawyer will look at a case after the result and think, as he or she would for a private client, what to bill the case. However, if an amendment hasn’t been submitted in time ie before the result then any cost overrun is refused under section 24 (1)(c) of the Legal Services Act.

If there is a particular disbursement, then approval has to be given for it in advance by the Agency eg for an expert and there may be overruns so not only does the lawyer have to look after his or her ticking time clock but also that of any contractors who are engaged.

It is questionable why legal aid has an estimate system in the first place when the Agency is able to “afford” to proceed regardless of the estimate, but its aim, really, is to ensure value for money. For private clients, we provide rough estimates, with room for manoeuvre. If you provide a quote, then you are going to ensure it is a figure which is going to cover every contingency. We are likely not to charge the full amount of the quote if, in good conscience, the work hadn’t been done to that level. With legal aid, similarly the legal aid provider has little knowledge of the way that a case may twist or turn eg whether the other side takes a combative approach or whether new facts may emerge which make the case more difficult.

So, an estimate on a legal aid form or an amendment request is going to be for the very top dollar to ensure that there is no shortfall if the case eventually ends up taking longer than anticipated. Often, the estimate will be more than the legal aid guideline, just in case, with flowery justifications advanced for why the case is special. This doesn’t mean that the lawyer is going to pad the bill. The lawyer just wants to be sure that he or she will not be left out of pocket.

So, an estimate will come in which will be for many more hours than the task will hopefully take. The Agency, on the other hand, will have regard to its prescribed steps and will consider that the lawyer is trying to inflate the task and will reduce the grant to guideline. Then, there would be a further amendment to try to reclaim lost ground. This ping-pong process leads to tension and a lack of trust on both sides.

Much better, in my view, to measure the output at the end of a particular stage and for that to be given a value, with or without reference to the time spent. Fixed fees invite cherry picking but automatic review of a provider’s time records would pay dividends. More detailed scrutiny of the work produced would be a better use of administrative time than fencing over estimates, amendments, trimmings, reconsiderations and reviews.

The estimate and amendment system is quite cynical now and providers typically leave it to the last minute to file estimates because then they will have a better idea of how long the work is actually going to take and the only requirement is that the amendment has to be in prior to the case being over. So you will see, up and down the country, lawyers faxing off amendments the night before the final day of hearing and then delivering an invoice which mirrors the amendment. It is an extra layer of paperwork that could be avoided, with significant savings for both lawyers and legal aid staff.

 

Individual Provider Model


The Agency runs an “individual provider” model. Notwithstanding that there might be 10 legal aid lawyers in a particular firm, all working cheek by jowl, working off each other, delegating and sharing to maximise outputs and results, the Agency takes the view that the lawyers should work as hermits. If a lawyer assigned to a case is called away or there is a fixture clash then a further level of paperwork is required to seek the involvement of a colleague. Not only any colleague, but a colleague who is accredited to provide the services at the necessary level.

The case may be at a high level on the bands, as in criminal legal aid, but the actual piece of work which is being delegated, while the lead provider is hors de combat, may be quite simple.

In the civil arena, there may be interlocutories or settlement conferences which a junior lawyer may be able to do as well as a senior lawyer, with different skills being involved for hearings involving witnesses.

What we have at the moment is that the lead provider is expected to do just about everything on a case (including completing and signing all the forms) and that leads to lawyer over-commitment and it also doesn’t allow junior lawyers within a firm to learn from the senior by working on pieces of a case with that senior lawyer.

The provider lists have become quite unrealistic, with a number of old timers hanging onto the list not doing any legal aid work, just in case a case comes up in that field, and with newcomers finding it difficult to advance such as to establish that they have had the necessary training and experience to handle a civil hearing. This could be anything from a Mareva injunction to a harassment application. Civil is just too wide a field and there are many who specialise in employment who should be able to advance more quickly, even though they don’t perform work in the other civil arenas.

Importantly, recent graduates are treated as non-lawyers and may do very little. Even qualified solicitors with less than 12 – 18 months’ experience are mere “secondary providers”. It appears that they are expected to shadow the lead provider every step of the way. This threatens to make them unemployable.  With the flood of work which is out there, for those few of us who practise in the legal aid area routinely, it is natural to wish to harness the resources which are available. But if such a “non-lawyer” or even a secondary provider meets a client on his or her own or does an urgent domestic violence application while the lead provider is in court, then that maybe regarded as performing substantive work beyond their station.

If the partners of the law firms are responsible for their staff, as they are, then the Agency should be prepared to accept that even non-qualified legal staff may perform roles to help maximise the efficiency of the firm as a whole. Ultimately, it is the partners who take responsibility for mistakes but, again, the Agency takes the view that, no, the individual provider is the person who is accountable. Under section 69 it argues non-listed providers can’t do anything on legal aid. And if a lawyer leaves a firm then there is a cumbersome reassignment process because the client isn’t really recognised as a client of the firm but as the client of the departing provider.

When a lead provider wishes to delegate or share a case, then prior approval is meant to be obtained from the Agency but that can be a drawn out process and the lead provider would have to have quite good forward planning. If you strike the right case worker within the Agency, then return email may occasionally work but, often, a process will have to be followed to obtain such prior approval.

Different Pay for Same Outputs


Sometimes too, a senior lawyer will want to do more on a senior case because the hourly rate is higher and that is another flaw in the system. Instead of working towards a monetary grant by more hours for a junior lawyer at a lower hourly rate, the Agency allows a set number of hours for a task irrespective of who does them.

The grant will be so many hours for a proceeding step and the natural human tendency of the senior lawyer will be to say that he or she should do that work because there will be a greater return (for the same output) than if the work were delegated. In fact, why hire a junior lawyer at all? Experienced lawyers need to be able to delegate and share for a more efficient outcome.

Random Lawyers for Crime


In the wake of the Bazley report there were concerns that some lawyers were becoming over-committed or engaging in grandstanding tactics to attract clients. The Agency chose to introduce a rotational system of assignment of lawyers in criminal cases. This only applies presently to PC1 and PC2 cases, but that is the lion sized share of them. PC1 and PC2 includes quite a few cases which are actually three strike offences so there are many quite serious offences within those bands.

While it may be rotational from the Agency’s point of view, it is pretty random from a client’s point of view and it is also particularly galling that existing clients have to be spurned by a lawyer when they are seeking help. It goes against the grain for a lawyer to say “sorry, even though I know all about you, I can’t act for you because the Legal Services Agency is going to assign a stranger to your case, against your wishes”.

The new system saves no money and breaks down relationships between lawyers and their clients. It means that clients will not know their lawyers, the client would not have approached the lawyer in the beginning and, in many cases, the lawyer who is assigned will only be able to offer the same value that a duty solicitor would because the lawyer will be unable to do necessary preparatory work eg preparation of prior written material which could improve the outcome. The typical criminal defendant will be anxious to get the case over with quickly and so the lawyer won’t have much time to build up the necessary rapport so as to be able to suggest otherwise. It can’t be efficient for this to occur because the knowledge of people and their families that is held by the lawyer who has acted for the family for many years can’t easily be learnt by a newcomer. Then, the family member may get in trouble another time and a new lawyer is assigned. It seems to be part of a self-fulfilling prophecy towards a public defender because the change has led to an undermining of the confidence which clients have in their lawyers and also the quality of the work being done.

With the gaps in knowledge, as one lawyer and then another works on a particular client’s case, there is also room for mistakes to occur and for there to be injustice. It would have been a simpler matter to have imposed a ceiling to the number of criminal grants that a particular provider may receive if there were concerns about legal aid providers becoming over committed. As it is, the new system just creates more fixture clashes because there will be grants without checking beforehand with the lawyer whether they are even available on the days that the clients are coming back to court. Also, there will be a mismatch of client and lawyer personalities at times and lawyers who have developed something of a speciality eg in acting for young clients or on particular types of cases, such as search cases, will not be matched up with the right case for their skill set.

Advice of Aid


When civil or family legal aid is granted, there is an obligation under section 21 to advise the court and the other side of the fact of the grant. Now that the Agency is part of the Ministry of Justice, it may be questioned why this information should not be provided by it. Instead, it is another responsibility on the part of the provider who needs to dictate a letter at the time of receiving the grant letter (another unit of cost for the taxpayer/client) or may forget to do it. Where possible, I try to inject the fact of a legal aid application into the proceedings eg into an affidavit in a Family Court case so that the issue is flagged.

When there is a grant letter, clients with houses will often be confused by the prescribed repayment amount which, despite its name, is the maximum possible repayment that could ever be required of the client. Simple folk will receive grant letters quite early in the piece and be surprised that the lawyer is being paid, say, $132,000 already for the work when that is only the maximum that they would ever have to repay.

Clients will frequently ring the lawyer, distressed at the high level of repayment that is supposedly expected of them and will wish to give up the proceedings entirely.

A further burden for the legal aid lawyer is the section 22 obligation over the life of the case to inform the Agency of changes in the client’s financial situation that could affect his or her eligibility as well as any address changes. Frequently, there will be mention of some financial aspect and the lawyer is meant to pass this on to the Agency with due diligence. Address changes occur like changes in the wind. What usually happens, in practice, is that the Agency will write to the applicant and find that its mail has been returned. Then the Agency will write a letter to the lawyer, seeking the lawyer’s advice as to the new address. All this takes time and money.

If something is left unattended eg an authority for a caveat or a charge (not just on a particular case but for each grant of aid related to the case) then the Agency threatens withdrawal of aid and then a copy of the letter goes to the applicant and the applicant chases the lawyer to require the forms to be filled in and, in this paper-go-round, there is more frustration and wasted time. The client will think the lawyer is being unresponsive while the lawyer receives so many of these letters across the desk every day that it is hard to keep up.

With each proceeding there is a requirement for a separate form and then a separate repayment regime, authority to lodge a charge or caveat and separate invoices. Clients are finding that they have multiple caveats or charges when it would be better for a land charge to be a flexible concept, allowing the Agency to require repayment of all money properly owing to it rather than as a security for a specific amount like a mortgage. A caveat surely performs that function already but all over the country we see caveats being discharged and replaced by land charges at great cost to the client and to the taxpayer.

 

Being Paid


When invoices are sent away, some weeks later a letter will come back, which is usually filed and ignored, referring to the invoice being paid. This letter should actually be given to the accounts department because it may involve a chipping away of the invoice in some way. Much time needs to be spent in grappling with why the Agency reduced the time on an invoice, even though the time was incurred. The time based system of legal aid gives support for the lawyers’ perception but the Agency wishes to reduce costs and so treats the time spent as only the starting point. No matter how reasonably incurred, it wishes to second guess the time that has been spent in an endeavour to reduce the bill. This is frustrating for all concerned.

Much administrative time on the part of lawyers and the Agency is spend in dealing with nit-picking issues over whether time has been properly spent. It is not always easy for the Agency to gauge the work that has been done because some lawyers’ time recording systems are rudimentary. If the lawyer provides an invoice with a six minute unit time record attached, then the Agency will be able to see much easier than with some cliché justification provided for on an amendment request or invoice, whether the work done was reasonable. If there were 22 phone calls from the client’s family, the lawyer may be asked why he could not control his or her client more but the Agency should also make allowance for the fact that when a lawyer tells the client to cut down on the communication, the risk is that the client will think the lawyer doesn’t care and that could drive a wedge between the client and the lawyer. This could give rise to the perception of lack of adequate representation and that could lead to Law Society complaints or appeals.

The current proceeding steps are rather reductionist. There doesn’t appear to be interest in the actual work done but how it fits into a particular pigeon hole and the pigeon holes are so wide as to be of little value. It is questionable what useful information is being passed on to the Agency. Some proceeding steps are quite generous and others miserly and the temptation is to put time into the more generous pigeon hole. There shouldn’t be the need to be so hermetic.

A related theme is when there are multi-aspects to work, such as in the family situation, where you might act for a client on relationship property, domestic violence and parenting. The Agency expects time spent, on often intertwined issues, to be separately accounted for and that is difficult to apply in practice.

Finishing the Case


There may be a final judgment eg in the relationship property area where the Agency will say that any amendments after that judgment are too late in terms of section 24(1)(c) but where the Agency may also try to argue that implementation work relating to the settlement eg waiting for money to arrive for the applicant to be bought out of his or her interest in the family home, associated conveyancing, and tasks involved with the settlement and distribution of money including the repayment of money to the Agency might have to be done for nix. Or is it a situation where the client may be charged privately at the provider’s usual hourly rate for such tasks? If the latter, then it is important for this to be set out in the client engagement letter and it is important to be absolutely clear with the Agency that this is what is going to be occurring because such work could be interpreted as being in breach of section 66 otherwise.

It is also necessary to be clear whether there is aid for chasing costs orders, in view of the section 36 obligation. The work involved in seeking costs is also after the fact of the final judgment and with there being room for error as to whether aid is available for such a task. An estimate for work also needs to include not only the work for the obtaining of the judgment but also the costs orders to follow, if the applicant is successful.

When the repayment is finally set, taking account of proceeds (including costs), there is the consideration of whether the applicant may seek a write off in whole or part of the legal aid repayment otherwise repayable. This often involves quite difficult submissions under section 37 and an eight-page write-off form 18 which clients will often not be able to complete on their own. Information will be required as to the justice of the situation as to why the client deserves to repay less, because he or she took less than they were otherwise entitled to or the other side was difficult, and there may be substantial hardship issues which need to be set out in some detail. There can be quite a lot of time spent in the write off phase and there doesn’t seem to be any room for payment for this work.

And when the repayment is finally fixed and all the land charges are in place then there will be some kind of debt repayment agreement negotiated between the debt section of the Agency and the applicant. There will be difficulties after the grant is over with the applicant moving address or falling short on a repayment plan. The Agency will then, sometimes months after the case is over, be writing to the lawyer for more information about the client’s whereabouts or will be copying the lawyer with letters which it has sent to the client, threatening sanctions if the repayment regime is not reinstituted. All of this paper landing onto the lawyer’s desk will add to the daily burden of the correspondence which flows in as part of what used to be called, in our office, “the crimson tide” before the LSA, in an apparent cost cutting move, went to photocopied letterhead.

Conclusion


Taking all of this red tape into account, it is easy to see why legal aid work is particularly stressful and unforgiving. The hourly rate is something which has been of concern for many years and it is getting more difficult to run a modern practice on the rates that are paid. But, if we just look at the existing system and ways that lawyers could do more with less, one key aspect would be to reintroduce a measure of trust and flexibility into the system. That way, those who are working their hardest to try to achieve the best for their clients won’t feel like they are banging their heads against a wall, with bureaucratic form filling and dashed expectations taking away enjoyment of their jobs. For myself, I still love my work but I wish that the $19.6 million spent by the Agency on its own administration in the year to 30 June 2010 could be reduced, as could the 20% or so of time which I spend on legal aid administration so that I could achieve more for my clients.

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