MEETING TOMORROW'S NEEDS WITH YESTERDAY'S BUDGETS:THE UNDERCAPACITY OF LEGAL AID IN AUSTRALIA TABLE OF CONTENTS
A Publication of
National Legal Aid
JULY 1996
INTRODUCTION
Applications and Approval Rates
Demand by Law type
Client Details
Demand in Criminal Cases
New Law Types
Growth in Demand
Matters dealt with vs Approvals
Summary
PART III: DECLINE IN REVENUE
Commonwealth & State/Territory
Grants
Special Trust & Statutory
Interest Accounts
Client Contributions and Recovered Costs
Summary
INTRODUCTION
This report has been prepared by National Legal Aid, which is constituted by the Directors of each of the eight Australian Legal Aid Commissions.
1. In March 1994, the Law Council of Australia released their report entitled "Legal Aid Funding in the '90s" (referred to herein as 'the report'). The exercise was an investigation to quantify the level of funding necessary to restore eligibility levels for legal aid to those levels set when in 1987-1988, the joint Commonwealth/State funding agreements were reached. These agreements are now on the point of renegotiation by the Commonwealth.
2. The main findings in the report were as follows:
3. Since that time, there has been a further erosion in the types of law covered by Legal Aid. It was demonstrated in the report how the level of demand had dramatically increased over four years. In the two and a half years since, other factors have become apparent that have resulted in a lessening in the availability of legal aid services to those in the community who need it most, in particular women.
4. On a global basis, Australian Governments have not dedicated funding to Legal Aid services with as much generosity as their foreign counterparts. In previous years, the comparison can be made as follows:
| Country Expenditure | Expenditure ($A & rounded) |
Population (rounded) |
Average per capita expenditure ($A) |
| England & Wales | $3,260m (1995) | 50 million | $65 |
| Scotland | $ 290m (1995) | 5 million | $58 |
| Netherlands | $ 325m (1993) | 15 million | $22 |
| Canada | $ 514m (1992) | 29 million | $18 |
| New Zealand | $ 48m (1993) | 3 million | $16 |
| Australia | $ 240m (1995) | 18 million | $13 |
| USA | $ 675m (1990) | 258 million | $ 3 |
5. Figures for other western countries are not available, however anecdotally, Sweden and Germany spend considerably less than the Netherlands ($A325m), with Spain and France running at around the USA average. Belgium and Italy have non-existent public schemes, however they conduct purely pro bono schemes through their private legal professions. It should also be borne in mind that England, Scotland and New Zealand work exclusively on the judicare (private lawyer) model and the USA operates solely on the staff (or inhouse) lawyer basis, apart from extensive pro bono work by private lawyers. Australia on the other hand has arguably the best model, being a mixed model of staff lawyers, private lawyers and community legal centres. In this way, all sections of the Australian community can be provided with services. This is vital for people living outside of the metropolitan areas.
6. The evolution of this mixed model has brought with it substantial benefits to Australia. The profession, where it works from private firms, has shown massive commitment to financially disadvantaged Australians through practitioners acceptance of heavily reduced fees. This was accepted and acceptable in a profession which carried a great ethical obligation, given its non-competitive access to representation before the Courts. However, the climate is now one of unparalleled levels of competition. This must bring with it a dilution of community expectations of the professions' capacity to assist the disadvantaged
7. Similarly, the profession where it works in Community Legal Centres, Legal Aid Commissions and the like cannot be expected to continue to devote seemingly endless hours of unpaid overtime to absorb reducing financial capacity.
8. This report highlights that a critical point is being reached in the provision of legal services to the disadvantaged. It clearly shows that there has been increased work and, with it costs, but a decline in revenue. It also suggests that that gap has been met by professional goodwill alone, whether within the legal firms, the Community Legal Centres or the Legal Aid Commissions.
9. This report has been prepared through the auspices of the Legal Aid Office of the ACT and was written by Ms Kay Withey Barralet, Executive Office of National Legal Aid in Canberra. Consultant and academic, Mr Ian McAuley of the University of Canberra provided expert assistance on data compilation and analysis.
10. A summary of the main findings of this report is as follows:
- 2.6% for advice given to clients,
- 2.4% for duty lawyer work and
- 6.3% for matters funded
Christopher Staniforth
PART I: ACTIVITY INCREASES
By way of preliminary explanation of the figures examined below, in outlining the increases in activity shown by statistics provided to the Commonwealth Government by the Legal Aid Commissions, it should be noted that when discussing 'matters', the areas of legal assistance provided in Child Support and Veterans cases are included. Duty lawyer services provided free to the public in Courts and legal advice interviews (both face-to-face or by telephone) have not been included in these calculations, unless specifically mentioned. As an overall view, the compound annual growth rate in activities undertaken by the Commissions has been:
| "Matters" | 6.3% annual growth from 1991/92 to 1994/95 |
| "Duty Lawyer" | 2.4% annual growth |
| "Advice" | 2.6% annual growth |
Going back further, in the five years from December 1990 to September 1995, the number of applications for legal assistance made to Legal Aid Commissions around Australia totalled 878,650. On a quarterly basis, this represented a rise of 22% from the December 1990 until September 1995 quarters. In that same period, approvals for grants of legal aid reached a total of 651,375. Again, on a quarterly basis, there was an increase of 29% between the December 1990 and September 1995 quarters. The refusal rate for applications for legal aid is currently running at approximately 20%. The most common reasons for refusal of applications relate to clients not satisfying the National Means Test applied by all Commissions. Other guidelines on eligibility can include, for example merit testing of the case or the fact that the Commission may not grant assistance in that particular type of matter.
To break down the matters that were approved in the period December 1990 to September 1995 into law types, it can be seen that there has been a change in the casemix. Criminal law currently accounts for 74% of approvals, Family law for 19% and Civil law for 7%. Over the five year period, approvals in grants of aid for Criminal law matters have increased 9.2%, Family law matters have decreased by 0.3% and Civil law matters have increased by 2.9%.
An examination of the client base of the Commissions reveals that the majority of clients assisted are males in the 21 to 30 year age group. This reflects the high demand for service from those charged with criminal offences, which is a predominantly male cohort (although there is evidence of an increase in young females assisted. This reflects a greater involvement in both criminal activity and Family Court proceedings as women). In the last five years, the male to female ratio of clients assisted has shifted from a proportion of 60:40 to its current figure of 67:33. There has been a steady proportion (around 35%) of clients who receive legal aid who are not in receipt of any Commonwealth benefit.
An interesting statistic reveals that there has been a 10% increase in assistance being provided to children in the under 18 year group. This is as a result of the vast increase in the number of Family Court appointments of a separate legal representative to act for a child of a relationship in proceedings before it - an area of law that has presented Commissions with a 57% increase in demand and has resulted in expenditure of some $6 million.
Clients of Aboriginal or Torres Strait Islander background are
increasingly using the services of the Commissions. In the last five years, the number of
applications approved for legal assistance for this client groups has increased from 3,092
in 1991 to 5,592 in 1995, a rise of 44.7% over the period.
The demand for legal assistance in the Criminal Law area can be compared with data recorded by the Australian Institute of Criminology. Over the period 1983/84 to 1993/94, crime has risen as detailed below:
Another factor in the demand for Legal Aid grants is the new class of cases that have evolved over the last few years. There has been an increase in immigration matters, repatriation appeals (which are not included in any special Veterans' programmes) and the separate representation of children in the Family Court.
a) Criminal Law
In the more established areas of the law, the Commissions are experiencing a strong growth in demand for assistance in criminal matters involving
In the past five years, the only area of major criminal matters that shows a significant decrease in demand is homicide (24% decline).
b) Family Law
The past five years have brought a large increase in demand for representation in matters involving domestic violence, matters involving the custody of and access to children and the separate representation of children in the Family Court. There has been a significant decrease in assistance given to matters involving property and injunctions (which would predominantly involve matrimonial property). The total decrease in this area amounts to 42%.
c) Civil Law
As outlined above, increases in demand are noted for matters involving Immigration (27%), Repatriation (6%) and matters arising from criminal actions (that is, victims of compensation) (21%). There have been decreases in property and personal injuries, contract, matters following death and professional negligence cases dealt with by the Commissions.
Matters
dealt with versus Approvals
The available data reveal that in both Criminal and Civil law areas, there has been an increase in the numbers of matters dealt with in each application. In Criminal Law, for example, whilst there has been a 4.8% overall increase in approvals over the last five years, the number of matters dealt with under each application has in fact climbed to 8.2%. This would reflect multiple charges being laid. In Civil Law, there was a 2.6% increase in approvals with the number of matters rising under each application by 3.1%. Family Law approvals dropped by 1.7% and a slight drop in the number of matters dealt with (0.5%).
The demand for legal aid services patently has been increasing over the last five years, particularly in relation to criminal matters. Both applications and approvals have risen substantially, compared to the reported crime increases in the Australian population generally. The development of new areas of law has required an input of resources to clients. More matters are being dealt with per application. The crime rates are rising in certain areas. There is a substantial increase in the need for separate representation of children who are the subject of litigation in family disputes. There has been a steady increase in the number of clients from Aboriginal backgrounds who are granted assistance by the Commissions.
PART II: COST INCREASES
In its report, "Legal Aid Funding in the 90s", the Law Council of Australia outlined the problems faced by Commissions arising from an increase in costs that are outside of their control. These included:
This situation has not eased and in many cases, even higher costs are now being borne by Commissions than in 1994. For example, the effectively non-discretionary provision of legal assistance to children, as ordered by the Family Court, has necessitated the engagement of large numbers of expert witnesses to provide family and/or medical reports for the assistance of the Court by both the medical and social science professions. In some jurisdictions there is a very limited pool of experts available who are able (or indeed, willing) to provide such specialist services. In such cases, high costs are incurred by way of professional fees, given the monopolies of the service providers and general high cost of medico-legal reports in Australia.
Added to this is the increase in costs of running Commissions, including wages, superannuation, insurances, leases, information technology and library facilities. Continuing negotiations with the private profession on the level of payment for referral work have resulted in increases in expenditure due to the increase in professional fees paid, both for solicitors and for barristers. This is brought about by the situation where it is not possible for a Commission to provide legal assistance 'inhouse' to a client by an employed solicitor. It then becomes necessary to pay for the services of a private solicitor in the community to undertake the work on behalf of the Commission. Some examples of where this would happen are where the client lives in a rural community not directly serviced by a Commission, where there is a conflict of interest (eg because another party to proceedings may be represented inhouse) or where the Commission does not have capacity to undertake the work at that time. Inhouse solicitors are finding that the types of cases approved for assistance are becoming more difficult, due to the nature of the legal problem, the complex interpersonal relationship between parties and social situations of clients. This will then result in longer periods of involvement by the legal practitioner and increases in the costs per matter.
Government requirements at both Federal and State/Territory level for statistical collection and administrative accountability are presently running at between 10% and 15%, depending upon the jurisdiction. Such requirements necessitate the allocation of staff time and use of IT facilities. Recording of statistical data by inhouse legal practitioners, which is increasing throughout the Commissions, will also result in cost increases.
Over the last two years there have been changes to some Commission structures resulting from Government inquiries. Extensive staff resources have been expended on compliance with calls for change and assistance to Government bodies undertaking reviews and audits. Radical changes have resulted, including restaffing of senior positions, involving recruitment expenses and redundancy payments.
Summary
Running costs of Commissions have increased. Levels of payments to external bodies and persons have increased Government reporting requirements have meant the allocation of inhouse administrative (and occasionally professional) staff time for compliance with auditing demands. Changes to Commission structures brought on by Government reordering have increased costs.
PART III: DECLINE IN REVENUE
Commonwealth and State/Territory GrantsFunding of Commissions at the Government level has fallen in real terms over the last five years. The basic question to be posed is what income was received per matter in 1991-92 and what shortfall has there been if Commissions were to expect the same real income per matter in later years. Total Government income has been (at current prices):
| 1991-92 | $247.6 million |
| 1992-93 | $251.8 million |
| 1993-94 | $253.6 million |
| 1994-95 | $256.5 million |
A calculation of the shortfall based upon growth in matters is:
Year |
Matters Handled | Income per Matter 91-92 |
Income Required if income per Matter is unchanged |
Total Income ($million) 1994-95 prices |
Shortfall ($million) being income required minus total income |
91-92 |
152 085 |
1 747 |
265.7 |
265.7 |
NIL |
92-93 |
153 053 |
267.4 |
261.2 |
6.3 |
|
93-94 |
159 636 |
278.9 |
258.5 |
20.5 |
|
94-95 |
183 947 |
321.4 |
256.5 |
64.9 |
(Note: deflator used in this calculation is the Treasury Hourly Labor Cost Index.)
The above table does not take into account the shortfall arising from the 1995-96 income figures.
The shortfall is both large and growing and is a disturbing quantification of the subsidy by the profession being provided to Legal Aid.
In particular, Commonwealth funding in real terms has fallen. When normalised against population growth, the contribution has fallen about $2million in real terms up to 1994-95. To maintain real population weighted funding, the 1996-97 Commonwealth grants should be about $134 million. On the other hand however, State and Territory grants have risen over the period, reflecting the budget "topups" made as a result of shortfalls in the Statutory Interest accounts.
A further blow to the income of the Commissions has been the steady decline in the Special Trust and Statutory Interest Accounts. This has resulted from the downturn in the economy, in particular the slowing of the residential housing market and in commercial activity generally. The figures are:
| 1991-92 | $45.6 million |
| 1992-93 | $29.5 million |
| 1993-94 | $20.4 million |
| 1994-95 | $21.2 million |
This income has also declined, due first to tightening of guidelines as to the sorts of cases in which the Commissions can give assistance (eg a decline in representation for personal injury matters and matrimonial property cases - which would have resulted in a reassessment of a client's contribution for reimbursement of the cost of providing legal assistance and therefore a cost-recovery exercise). Another factor in the dropping levels of client contributions is that due to changes to work practices within the private profession, many more cases are being undertaken on a speculative basis - that is, solicitors are more willing to conduct a case on the basis of the professional fees being settled at the conclusion of a matter, rather than on an on-going basis and indeed, on a contingency fee basis. Thirdly, many more clients of the Commissions are not in a position to pay contributions than was previously the case. They have no capacity given their limited incomes. Commissions are under no legislative imperative to be self-funding and indeed, the governing Acts mandate them to provide assistance to those persons who cannot afford the services of private practitioners.
The figures relating to declining contribution and costs receipts are as follows:
| 1991-92 | $39.5 million |
| 1992-93 | $40.3 million |
| 1993-94 | $38.8 million |
| 1994-95 | $32.1 million |
The income of the Commissions has fallen in real terms over the past five years. This includes both public and private revenue.
The major philosophical argument that needs to be addressed by the Australian community is the value that is to be placed on the provision of quality, accessible legal assistance to those who cannot afford the services of private legal practitioners. The need for access to the justice system does not just rest on people on low incomes. It has been readily acknowledged that certain sections of the community are more disadvantaged than others. These include:
These people represent the significant client groups of Legal Aid Commissions and indeed, would number in the majority of Australian residents in total. It has been shown above that there has been an increase in demand for the services of the Commissions, particularly for children and an unfortunate decrease in the availability of resources going to women.
Attempts at systemic change to the justice system, whilst noble in sentiment, often do not address the reality of personal constraint imposed on sections of the community who are unable to access mainstream legal and judicial services through the barriers of language, gender, age, disability, personality, location, education and ethnicity. Quests by Governments to channel people with a legal problem into negotiated settlements often do not taken serious enough account of the fact of violence and imbalance in power roles within relationships or of cultural mores. Further, people have an immediate problem that requires practical solutions now - not next week in counselling. Their children are in custody, abducted or abused. Their partner is on remand and facing charges that will result in loss of income or even their residences. They face deportation to a hostile home country. They have suffered personal injury as a result of another's negligence or intention. They need help immediately and they are unable to handle it themselves due to the intricacies of the system and ignorance of the arcane mystery that is "the Law".
Australia is a signatory to many international agreements and treaties. Recent judicial decisions have dealt with the problem of incorporation of those agreements or treaties into Australian domestic law and there have been attempts to deal legislatively with the situation. However, the threshold question has to be the commitment of the community to embrace the concept of the granting or upholding of agreed human rights on a practical level through the laws of the country. This is a question for Australians that will not go away.
PART V: CONCLUSION
The Australian Legal Aid system is reaching a crisis point through a demand for services in the community that is unmet by Legal Aid Commissions by necessity. This unmet need will continue to increase as funding continues to decline. Australia's commitment to the public legal system does not compare well with other western countries. Government has an obligation both to uphold and maintain the rule of law. Whilst resources are allocated to the proper running of judicial systems and the detection and prosecution of offences, similar adequate resources have not been provided to protect the right of the individual to initiate or defend proceedings if warranted.
What this really represents is a contribution from the legal profession (on an unpaid basis) of some $65 million over the last five years. The goodwill of the legal profession, both publicly employed and engaged in private practice, cannot continue to be taken for granted by Governments. Many private legal practitioners are now not in a position to undertake work that results in an overall loss, let alone cover the costs to them and to their firms of providing such a subsidised service. The anticipated renegotiation of funding agreements between Governments will be likely to result in decreases to current levels of income for the provision of Legal Aid. Tomorrow's legal needs of the Australian community cannot be met with yesterday's budgets. Such a decline in resources will have major long-term ramifications in Australian society. Prison populations will rise as people are unable to obtain legal advice and representation to defend charges that will result in incarceration. Similarly, loss of income as a result of non-representation in the Courts will place added burdens on the welfare system. Families will continue to endure the impact of violence and conflict, again imposing strain on social services. People with disabilities will continue to face involuntary restraint and loss of income. Victims of crime will go uncompensated. Increasing levels of demand for services will result in unacceptable stress to legal service providers, already a declining group, through trying to meet that demand.
Australian society should not have to accept a public legal
system that is so under resourced as at present and one that is likely to decline even
further.
TABLES
Note: Following Tables are attached to the printed version of this report available from National Legal Aid.
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