Who Gets a Slice of Justice? Efficiency Review Puts Legal Aid at Risk
BY Harry Jiang
Introduction:
Given the rise in legal aid funding, the New Zealand Government has announced a 2025 efficiency review of the legal aid system. While this review aims to ensure better use of public funds, it also raises questions about whether the current system is achieving its intended purpose. Despite recent improvements, the system still remains under pressure from social and economic realities. This article explores the current challenges faced by vulnerable applicants and how these issues, if not addressed, may place additional strain on access to justice.
What is Legal Aid?
Legal Aid is a government-funded scheme providing legal advice and representation for people who cannot afford a lawyer. In New Zealand, this covers criminal defence, family court matters and civil proceedings. Its purpose is to promote access to justice by establishing a system that:
(a) provides legal services to people of insufficient means; and
(b) delivers those services in the most effective and efficient manner.
Legal aid is treated as a loan rather than a grant. This means the recipients may be required to repay some or all of their legal aid costs, depending on their financial situation. Eligibility is determined through a means test, based on the applicant’s gross income and whether they have dependent children. However, this threshold excludes many low to middle-income individuals who are still unable to realistically afford private legal representation.
Barriers to Accessing Civil Legal Aid
1) Strict Eligibility Criteria
Under s 10(3) of the Legal Services Act 2011, the Commissioner must refuse to grant legal aid if the applicant exceeds the income threshold. The Commissioner is required to assess a wide range of considerations, including gross income, availability of that income, disposable capital and the accessibility of that capital. Ultimately, the Commissioner needs to be satisfied that the applicant does not have sufficient means to obtain legal representation on their own.
In light of rising living costs and the successive increases in the minimum wage, the legal aid income threshold has been increasingly out of step with economic realities. While the government has made adjustments to improve eligibility, the maximum gross income for a single person without any dependents to qualify for civil legal aid is $27,393 per year, or approximately $526 per week before tax. In contrast, a full-time minimum wage employee’s gross income is $48,880 per year. As a result, individuals earning the minimum wage are classified as too wealthy for legal aid, despite lacking the financial means to afford private lawyers.
This creates a paradox, where individuals earning at minimum wage levels are deemed by the legal aid system to have “sufficient means” to afford legal representation, when in fact they do not. After deducting tax and living costs, there is little to no disposable income to fund a legal case. This becomes problematic in civil proceedings, where fees for private lawyers range from $200 to $800 per hour.
2) Growing Demand and Strained Resources.
Due to the disconnect between eligibility thresholds and actual affordability, a growing number of individuals are appearing in court unrepresented. According to data from the Ministry of Justice, the proportion of unrepresented litigants in civil proceedings has increased from 52% to 72% over the past ten years. This notable expansion in self-representation means issues cannot be addressed properly, leading to poorer outcomes for litigants, longer court proceedings and added pressure on the judiciary to ensure procedural fairness in the absence of counsel.
3) Shortage of Legal Aid Lawyers
Despite the easing of legal aid eligibility criteria in 2023, which made an estimated 93,000 more people eligible for assistance, many applicants are being turned away by lawyers due to a shortage of legal aid providers. Research from the New Zealand Law Society revealed that in 2021 alone, approximately 20,000 individuals were turned away by legal aid lawyers. While the government had increased the hourly remuneration rate for legal aid lawyers in 2022, this uplift has not been sufficient to retain lawyers, particularly senior lawyers.
Senior lawyer Jeremy Sutton has noted that fewer experienced lawyers are committed to legal aid work, revealing that even the most senior lawyers receive around $134 per hour (plus GST), significantly lower than the market rates charged by private lawyers, which range from $200 to $800 per hour. Thus, this disparity creates significant barriers to access to justice, as complex cases requiring senior lawyers are increasingly handled by less experienced lawyers. This leaves vulnerable clients without the level of support to navigate complex legal matters.
Recommendations:
Rebalance Legal Aid Funding Priorities
Legal aid applicants are involved in cases they need to claim or defend, yet they are already in a vulnerable position due to the burden of proving financial eligibility to meet strict threshold requirements. Beyond this, they must find a legal aid lawyer who is experienced and will not turn them away because of the comparative low remuneration. This process imposes further strain on applicants who are already in a difficult position to meet basic living standards.
Introducing a reasonable cap on expert disbursement fees would allow more funding to be allocated toward lawyer remuneration, helping to retain senior lawyers within the legal aid system and attract junior lawyers. As Steven Zindel, a longtime advocate for equitable access to justice has pointed out, nearly half of legal aid spending goes toward disbursements, including high-cost expert reports. It may give rise to the concerns of reducing the availability of expert witnesses, however, the absence of legal representation poses a more immediate and systemic threat to justice. In most cases, the absence of lawyer has far more severe implications for justice than the absence of an expert report. Thus, prioritising the retention of legal aid providers and attracting new blood is essential for a sustainable long-term growth and is critical to ensure the system remains accessible, functional and just.
Conclusion:
The legal aid system serves the purpose to ensure that individuals have access to legal representation and the justice system when they are financially disadvantaged. The efficiency review must look beyond cost-cutting and consider the real barriers and realities that applicants and providers are facing. Structural issues of outdated income thresholds, rising self-representation and underpaid legal aid lawyers undermine accessibility, efficiency and justice. Any review that fails to address these realities risks further eroding access to justice for New Zealand’s most vulnerable.
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