SEP 22 2021

New Zealands Legal Aid Gap

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The New Zealand Legal Aid system (‘LA’), which is governed by the Legal Aid Services Act 2011 (‘LSA’), provides government assistance to individuals who, due to their low income and/or asset availability, would otherwise be unable to afford a lawyer. LA is available for a wide range of proceedings, including criminal, family, civil, employment mediation, appeals and tribunals, and may be granted to an Applicant upon the completion of a LA Application. However, for some like finding pickles in a burger, LA does have its downfalls: something I (and many others) have labelled the “Legal Aid Gap”.

Eligibility

The “Legal Aid Gap” is rooted in LA’s eligibility criteria, which is largely assessed based on income and assets. The LA eligibility criteria is an interesting mixture of confusing and straightforward, and can be broken down as follows: an Applicant with no spouse or dependent children must earn below $22,846 per annum, with one dependent below $36,180, with two dependents below $52,027 and so forth, with five dependents being below $73,853.[2] There is also a maximum threshold set for an Applicant’s disposable capital, being $3,500 for a single (without spouse, partner, or dependents) and $5,000 for those with a spouse, partner or one or more dependents. The maximum threshold for an Applicant’s value of equity in a home is set at $80,000.[3] To break those figures down further, a single Applicant without dependents must earn under $439 per week to be eligible (equivalent to approximately 20 hours per week at minimum wage or receipt of the Jobseeker Benefit and Winter Energy Supplement Payment) or an Applicant with one dependent must earn under $695 per week to be eligible (equivalent to 34 hours per week at minimum wage).

If an Applicant is over the income and/or asset threshold, they are likely to face issues with eligibility for LA. This is where the “Gap” comes into play. An average private lawyer, depending on level of experience, area and the nature of the instructions given, will cost anywhere from $150 p/h to $550 p/h and above (plus GST, of course). A non-complex family matter can require anywhere from 5-10 hours of time, totaling a minimum fee of $1,000 or more. A complex family matter requiring a more experienced counsel can necessitate anywhere from 35-45 hours of time, adding up to over $17,000 at a minimum. An individual working a 40-hour week for minimum wage ($20 p/h) will earn a gross pay of $800 per week or $41,600 annually and will have (as an estimate) weekly expenses of $250 for room rental (in Wellington!), $80-100 for food, $30-50 for household expenses (gas, power, internet, phone), $25-50 for personal expenses (toiletries, cleaning products), $25-50 for transport, $30 for subscriptions (Netflix, Disney plus, or Spotify) plus unexpected expenses. This individual would likely have $50-150 “spare” each week, which could pay for 15-45 minutes of a young lawyer’s time or 10-30 minutes of an experienced lawyer’s time. This limited time, of course, may be useful on a surface level but the individual will still otherwise be functioning as a self-represented litigant. This individual does not meet the LA criteria, yet they are also unable to afford effective (or even adequate) legal representation, and therefore, they fall through the cracks of the system.

So, does this mean that there are thousands upon thousands of New Zealanders who are hopelessly trying to navigate New Zealand’s complex legal system? Well, not necessarily. There are a number of alternative options available to those who do not qualify for LA. Some, although not all, private lawyers offer one or more of the following options upon negotiation with a client:

  1. Fixed-fee – where a client and lawyer discuss the details of the client’s matter and the lawyer agrees to complete the work for a fixed-fee amount. For example, client “S” needs to apply for a Limited Licence and Lawyer “B” agrees to complete all necessary work for that application for a fixed fee of $1,000 plus GST. The importance of a “fixed fee” is that they usually do not change, so the client is aware of how much they will be expected to pay for the services before they engage the lawyer.
  2. Payment plan –where a lawyer and client discuss and agree for the lawyers’ fees to be paid on a rate of X per week until payment of the bill is complete. Sometimes this option will be used in conjunction with a fixed-fee.
  3. Contingency – where a lawyer agrees to be paid the total of their fees at the end of the client’s matter. This option is most suited to civil or family matters (particularly matters involving the sale, purchase or exchange of real property), for example where client “G” is negotiating a s 21 Separation and Relationship Property Agreement and expects for the family home to be sold, and lawyer “A”s fees will therefore be paid out of the settlement funds from the sale of that property. This option can also be used in conjunction with the fixed-fee option.
  4. Success payment –where a lawyer agrees to the payment of their fee being dependent on the success of the client’s matter. For example, in a civil matter involving the alleged non-payment debt, the lawyer “D” may agree to be paid X amount if client’s “C”’s claim for repayment of the debt owed by Respondent “E” is successful. This option can also be used in conjunction with the fixed-fee and payment plan options.
  5. Pro Bono – this, of course, is an option that favours the client, where the lawyer agrees to represent the client without payment.

But, are these options sufficient to close the Legal Aid Gap? Or do they simply increase the financial burdens on those who are already under stress? I welcome comment.



J C R Cooper

(employed) Barrister




All figures before tax



https://www.justice.govt.nz/as... at 27 and 28

Refer also to ss 6 to 11 LSA 2011. 

The New Zealand Legal Aid system (‘LA’), which is governed by the Legal Aid Services Act 2011 (‘LSA’), provides government assistance to individuals who, due to their low income and/or asset availability, would otherwise be unable to afford a lawyer. LA is available for a wide range of proceedings, including criminal, family, civil, employment mediation, appeals and tribunals, and may be granted to an Applicant upon the completion of a LA Application. However, for some like finding pickles in a burger, LA does have its downfalls: something I (and many others) have labelled the “Legal Aid Gap”.

Eligibility

The “Legal Aid Gap” is rooted in LA’s eligibility criteria, which is largely assessed based on income and assets. The LA eligibility criteria is an interesting mixture of confusing and straightforward, and can be broken down as follows: an Applicant with no spouse or dependent children must earn below $22,846 per annum, with one dependent below $36,180, with two dependents below $52,027 and so forth, with five dependents being below $73,853.[2] There is also a maximum threshold set for an Applicant’s disposable capital, being $3,500 for a single (without spouse, partner, or dependents) and $5,000 for those with a spouse, partner or one or more dependents. The maximum threshold for an Applicant’s value of equity in a home is set at $80,000.[3] To break those figures down further, a single Applicant without dependents must earn under $439 per week to be eligible (equivalent to approximately 20 hours per week at minimum wage or receipt of the Jobseeker Benefit and Winter Energy Supplement Payment) or an Applicant with one dependent must earn under $695 per week to be eligible (equivalent to 34 hours per week at minimum wage).

If an Applicant is over the income and/or asset threshold, they are likely to face issues with eligibility for LA. This is where the “Gap” comes into play. An average private lawyer, depending on level of experience, area and the nature of the instructions given, will cost anywhere from $150 p/h to $550 p/h and above (plus GST, of course). A non-complex family matter can require anywhere from 5-10 hours of time, totaling a minimum fee of $1,000 or more. A complex family matter requiring a more experienced counsel can necessitate anywhere from 35-45 hours of time, adding up to over $17,000 at a minimum. An individual working a 40-hour week for minimum wage ($20 p/h) will earn a gross pay of $800 per week or $41,600 annually and will have (as an estimate) weekly expenses of $250 for room rental (in Wellington!), $80-100 for food, $30-50 for household expenses (gas, power, internet, phone), $25-50 for personal expenses (toiletries, cleaning products), $25-50 for transport, $30 for subscriptions (Netflix, Disney plus, or Spotify) plus unexpected expenses. This individual would likely have $50-150 “spare” each week, which could pay for 15-45 minutes of a young lawyer’s time or 10-30 minutes of an experienced lawyer’s time. This limited time, of course, may be useful on a surface level but the individual will still otherwise be functioning as a self-represented litigant. This individual does not meet the LA criteria, yet they are also unable to afford effective (or even adequate) legal representation, and therefore, they fall through the cracks of the system.

So, does this mean that there are thousands upon thousands of New Zealanders who are hopelessly trying to navigate New Zealand’s complex legal system? Well, not necessarily. There are a number of alternative options available to those who do not qualify for LA. Some, although not all, private lawyers offer one or more of the following options upon negotiation with a client:

  1. Fixed-fee – where a client and lawyer discuss the details of the client’s matter and the lawyer agrees to complete the work for a fixed-fee amount. For example, client “S” needs to apply for a Limited Licence and Lawyer “B” agrees to complete all necessary work for that application for a fixed fee of $1,000 plus GST. The importance of a “fixed fee” is that they usually do not change, so the client is aware of how much they will be expected to pay for the services before they engage the lawyer.
  2. Payment plan –where a lawyer and client discuss and agree for the lawyers’ fees to be paid on a rate of X per week until payment of the bill is complete. Sometimes this option will be used in conjunction with a fixed-fee.
  3. Contingency – where a lawyer agrees to be paid the total of their fees at the end of the client’s matter. This option is most suited to civil or family matters (particularly matters involving the sale, purchase or exchange of real property), for example where client “G” is negotiating a s 21 Separation and Relationship Property Agreement and expects for the family home to be sold, and lawyer “A”s fees will therefore be paid out of the settlement funds from the sale of that property. This option can also be used in conjunction with the fixed-fee option.
  4. Success payment –where a lawyer agrees to the payment of their fee being dependent on the success of the client’s matter. For example, in a civil matter involving the alleged non-payment debt, the lawyer “D” may agree to be paid X amount if client’s “C”’s claim for repayment of the debt owed by Respondent “E” is successful. This option can also be used in conjunction with the fixed-fee and payment plan options.
  5. Pro Bono – this, of course, is an option that favours the client, where the lawyer agrees to represent the client without payment.

But, are these options sufficient to close the Legal Aid Gap? Or do they simply increase the financial burdens on those who are already under stress? I welcome comment.



J C R Cooper

(employed) Barrister




All figures before tax



https://www.justice.govt.nz/as... at 27 and 28

Refer also to ss 6 to 11 LSA 2011.