‘Coupon justice’ won’t address legal aid crisis

Will vouchers to access legal aid services be the fix the Australian legal system needs? AAP/Lee Besford

Most Australians with legal problems are unlikely to be able to access the help they need. Unless you’re wealthy and can pay for a private lawyer, or extremely poor and disadvantaged and able to access legal aid, legal services are out of reach for most.

The Productivity Commission is currently reviewing access to justice arrangements in Australia, and one of their proposals is the introduction of legal aid vouchers. While the suggestion has gained the support of ardent free marketeers like the Institute of Public Affairs, the reality is that coupons won’t fix Australia’s legal aid crisis.

Australians’ need for legal services

According to the Law and Justice Foundation of New South Wales, almost half of Australians will experience at least one legal problem each year. Some people experience more, and more serious legal problems. Around 20% of the population experiences 80% of the legal problems. People with a disability, single parents and the unemployed were among those more likely to experience legal problems.

Most people are unable, or unwilling, to seek assistance from lawyers.

In 2009, the Commonwealth attorney-general’s department estimated that the average legal costs including disbursements of bringing a Family Court case would be around A$6500. A Federal Court case, on the other hand, cost $74,000 in 2007-08 - 84,000 with disbursements at an additional $25,000.

Both of our major political parties have recognised that access to the legal system is unaffordable for most Australians. Former Labor attorney-general Robert McClelland has observed that:

…[i]f you are from middle Australia and you want to embark on a substantial piece of litigation, you really have to put your house on the line.

This sentiment has been echoed by current attorney-general George Brandis, who has written that “[u]nless you are a millionaire or a pauper, the cost of going to court to protect your rights is beyond you”. Brandis went on to say that:

This is a social crisis in the making. The courts are the guarantors of our rights, but increasingly the costs of legal representation and court fees mean that ordinary Australians are forced either to abandon their legitimate claims or enter the minefield of self-representation.

It’s clear that the private market has failed to deliver affordable legal services for many Australians. Given the moral imperative of ensuring equal access to the law - and the vital role legal assistance plays in this - governments need to act to ensure those who can’t otherwise afford a lawyer can access one when needed.

The current “safety net” of legal assistance is underfunded and overstretched. Government funding goes to legal aid commissions, community legal centres and Indigenous legal services. Legal aid commissions employ in-house lawyers to assist people but also provide funding to people with eligible legal matters to engage private lawyers to assist them.

The Productivity Commission review

In June 2012, the Australian government asked the Productivity Commission to undertake a 15-month inquiry into Australia’s system of civil dispute resolution, with a focus on constraining costs and promoting access to justice and equality before the law.

In September this year, the Productivity Commission ommission issued a 53-page issues paper, with 209 questions grouped into 122 topics, seeking information from the community and affected stakeholders.

The issues paper asks what approaches might be more effective for the funding of legal assistance services, and specifically mentions vouchers as one possible approach. While the Institute of Public Affairs has made its position on the subject clear, there is a rather large hole in the voucher argument if viewed in terms of enabling access to justice. The reality is that vouchers are not the answer to the legal aid crisis.

Explaining vouchers

Nobel Prize-winning economist Milton Friedman first suggested using vouchers for US school education in 1955. According to The Economist:

…the principle is compellingly simple. The state pays; parents choose; schools compete; standards rise; everybody gains.

However, it’s not quite that simple, and the effectiveness of vouchers in school education is controversial.

New attorney-general George Brandis has previously argued that the cost of going to court is beyond most Australians. AAP/Alan Porritt

In the limited international comparison available in the area of legal assistance, it’s clear that there are problems with the use of vouchers. Given that they are “fixed fee”, critics in Canada note that lawyers are reluctant to assist particularly vulnerable clients and in matters that are moderately complex, and the number of vouchers issued has been steadily decreasing, while the number of people with legal problems grows.

Lawyers are unable to operate profitable private practices on these rates, which acts to reduce choice as lawyers opt out of these systems. Concerns like these are already a factor for private practitioners who provide legal aid to Australian clients.

Some students in the US are allocated a legal aid voucher each semester, which fails to understand the “clustering” of legal problems in the community that recent Australian research shows is a characteristic of legal need in this country.

In Hong Kong, approval of aid in civil law cases takes up to three months, which may be too late in cases of house repossession or insurance claims, or even an intervention order in family law matters.

What will work?

Vulnerable Australians find it increasingly difficult to access legal assistance, but vouchers are not the solution. Legal aid is not a perfect market full of rational actors – quite the contrary.

Take Craig, who has a mental illness who will be evicted from his home, who seeks the assistance of a lawyer. Or Dinah, a refugee single mother whose insurer refuses to pay her losses she has suffered. Or Sally, who has finally - after talking to a lawyer - decided to obtain an intervention order against her abusive ex-partner.

To expect these people to apply for vouchers through complex bureaucratic processes is simplistic, idealistic and unlikely. To expect that private firms will be willing and able to assist these vulnerable clients, at paltry rates, is another step too far.

A voucher system would be an ineffective way of dealing with legal need. We need properly funded legal assistance services, with a focus on early intervention and prevention, and that relies on the expertise and experience of frontline services to inform policy development and service delivery. Australia’s system must recognise the increasing complexity of legal issues and the complex lives of people with legal problems.

Coupons just won’t cut it.