Third Readings

I move, That the Legal Services Amendment Bill, the Accident Compensation Amendment Bill, the Care of Children Amendment Bill, the Child Support Amendment Bill (No 2), the Family Proceedings Amendment Bill, and the Property (Relationships) Amendment Bill be now read a third time. These six bills have been divided from the Legal Assistance Amendment Bill.

Access to justice is a fundamental principle of our justice system, and this Government is committed to ensuring that those who require legal assistance can access it. Granting legal aid requires an assessment of the ability to pay for representation, which the Legal Services Act 2011 manages through means testing. Although legal aid may be provided to a single person with no dependants on an annual income of $22,000, it can also be provided to a person with an annual income of $72,000 and several dependent children. The means test responds to the personal circumstances of each applicant.

Administering legal aid is a balancing act. It is important to ensure legal representation is available to those who cannot afford it, but also that the spending of public funds on legal aid is done effectively and efficiently. We must closely assess expenditure on legal aid and prioritise how legal aid money is spent. Legal aid expenditure increased by 55 percent between the 2006-07 and the 2009-11 years. That was from $111 million a year to $173 million a year, placing the legal aid budget under extreme pressure. This growth was expected to result in a $402 million gap over 5 years between forecast expenditure and available funding. The Government had to act to bring this growth under control, and did so through a comprehensive set of reforms to legal aid.

There are three main ways that legal aid expenditure can be controlled. The first is to reduce the number of grants, which has the largest impact on those people who rely on legal aid to fund their representation. The Government has been extremely careful in seeking savings in this area, particularly for the criminal justice system. The Legal Services Amendment Bill makes fair changes to reduce the number of grants. These include tightening the criteria by which applicants can receive legal aid for civil proceedings when their income exceeds the prescribed thresholds. Special protections have been put in place in the case of asylum proceedings, care and protection applications, and domestic violence applications. In these cases, the means test will be less stringent.

The second method by which legal aid expenditure can be controlled, reducing the cost of each grant, has a smaller impact on legally aided people and largely affects the legal profession. Reducing the costs of grants ensures that limited taxpayer funds are spent as efficiently and effectively as possible.

The third method by which legal aid expenditure can be controlled is by recouping a large proportion of legal aid debt. For 75 percent of those who receive legal aid the requirement to repay their debt is waived, because they cannot afford to repay the debt, because the debt is so small it is not worth collecting, or because it would not be just or equitable to enforce it. The 25 percent of legally aided people who are required to repay their debt are those who have been assessed as having the means to do so.

The Legal Services Amendment Bill puts in place mechanisms to ensure that a greater proportion of this legal aid debt is repaid in as prompt and as efficient a manner as possible. The bill extends provisions to allow interest to be charged on all finalised debt, although the Government has decided to delay the imposition of interest for 6 months after debt is finalised. The bill streamlines the use of deduction notices to allow the use of this more efficient method of repaying debt by deducting money direct from people’s wages, benefit, or bank account. The bill also allows the Legal Services Commissioner to refuse to grant civil legal aid to applicants who are in arrears on repayments of a previous grant of legal aid, unless the interests of justice require otherwise. Applicants will become eligible again once they have undertaken to restart their payments.

The exception to this focus on increasing repayments of legal aid debt from those who can afford to do so is the reintroduction of the user charge for civil legal aid. The user charge was introduced in 1970 but was removed in 2006 due to an inefficient administrative process preventing it from being cost-effective. A more straightforward process has now been developed, allowing for the reintroduction of the user charge, which regulations will set at $50.

The changes made by this legislation and the earlier reforms in 2011 are consistent with the obligation of the New Zealand Bill of Rights Act 1990, and maintain protections for vulnerable people who require legal assistance. While the Legal Services Amendment Bill makes changes to the legal aid framework, its supporting bills focus on sharing between the State and private parties the costs of court-appointed lawyers for children. By default the court will order the relevant parties to refund the Crown two-thirds of the cost of lawyer for child. The court has discretion to lower the proportion a party pays or waive it entirely if it would cause serious hardship to that party or their dependent child. The majority of these orders will be made under the Care of Children Act, which requires the court to promote the welfare and best interests of the child.

The Legal Services Amendment Bill and its supporting bills represent the best compromise between ensuring that legal aid expenditure is sustainable and ensuring that people without the means to fund their own legal representation receive any necessary advice. The bills ensure the legal aid scheme will be viable into the future. If a person is eligible for legal aid and associated legal assistance, they will receive it. I commend this legislation to the House.

Rising as I do to speak on the legislation arising from the Legal Assistance Amendment Bill, let me begin by saying that if the Minister of Justice has demonstrated one thing tonight, it is her uncanny ability to speak through both sides of her mouth. That was an outrageous speech. That was an outrageous set of propositions that that Minister put up to justify this unjust, hopeless, and very unfair legislation. You cannot talk about access to justice in one breath and then talk about all the measures you have got in place in this legislation to cut access to justice. That is unconscionable and it is irreconcilable. That Minister has tried to do it, and it just totally lacks credibility. Members opposite know that, which is why they sit there in their seats crowing and bleating away. They know that the Legal Services Amendment Bill is designed to do one thing, and that is solely to cut the funding to legal aid. It is not about justice. It never was about justice. It is about cutting funding to legal aid. If there is one thing that has become demonstrably clear about this Government, it is that it has no interest in justice, it has even less interest in the rule of law, and it simply does not respect the fact that people are finding it harder and harder to make ends meet and that those who are imposed upon or who face an injustice are finding it harder to get access to court and to court representation.

Let us look at the measures that this bill puts up—let us just look at those measures. Now the Legal Services Commissioner will have the power to charge interest on unpaid legal aid debt. Let us remember that the people who get access to legal aid, by and large, are the poorest, those on the lowest incomes. That is why they get legal aid. This Government wants to make it even tougher for them now, and to say: “If you have the temerity, in your low-income status, to put your hand out to the State for even more assistance because you have to front up to the court, whether on a criminal matter or a civil matter, we are going to make it tougher for you because where that legal assistance is in the form of a loan, we are going to charge your assets and we are going to charge interest on that grant. We are going to charge interest on that grant.” Far from making it easier to get access to justice, this will make it harder.

Then this bill goes on to give the Legal Services Commissioner the power to authorise deductions from a legal aid claimant’s sources of income, whether it is their pay, whether it is their benefit, or whether it is any other source of income. The Legal Services Commissioner will have that power. That is a huge power. The power is not over just small little bits of money, small contributions; that power extends to the Legal Services Commissioner being able to deduct up to 40 percent of a legal aid claimant’s after-tax income—40 percent of a legal aid claimant’s after-tax income. And that Minister has the cheek to come here and say: “We are improving access to justice.” There is no improvement in access to justice in this legislation. This is an outrage.

Then, if that were not enough, there is this. What the Minister has proposed in the bill is that if a legal aid claimant has moneys owing on previous legal aid grants, they can be denied further legal aid. Never mind that they need it, and never mind that they may be compelled to go to court to answer a charge, or they may be placed in a situation where justice demands that they take a claim to court, and they need the assistance of the State to do it. Never mind any of that. If they have a previous grant to which they are required to contribute in part or in whole, if they have not made those payments, they can be denied further legal aid. This is on top of the interest that will be charged, this is on top of any deductions that have already been made, and it is also on top of any user charge that has already been levied.

Let us be very clear. Legal aid in this country is under threat. This Government has already introduced a fixed fee system for legal aid that is making it harder for lawyers to provide the quality of service and the extent of the service that once they were able to. Their time is constrained because the fee is constrained. And whereas once upon a time the user charge may have been able to be absorbed and the lawyer act on legal aid for a client, that is much less likely to be the case. So the pressure is coming from all sides. The pressure is coming from all sides, and this Minister says that this legislation is about improving access to justice. This will not improve access to justice.

This is about a Government that has spent years spinning a yarn that it cannot afford some things, things like justice and things like looking after people. It can afford other things, like bailing out Solid Energy and like spending up its fast mover improvement fund—what does it call it, the fund it set up from the sale of State assets, which it has spent six times over already—

💬 Sue Moroney: The Future Investment Fund.

The Future Investment Fund, that is it—the Future Investment Fund. The Government can spend money. It can spray money around on all sorts of things that suits it. It can spend it six times over. But for the little people of this country who look to the State for assistance when they most need it, when they need to go to court, when they need to defend charges, when they need to deal with family proceedings, they will not get it—not from this Government, not from this lot. This Government just does not care about those people who every day face struggle, face hardship, face poverty, and look to the Government for support and assistance.

This Government is driven solely to drive down the cost of legal aid. It is not about the demands of justice. It is not about the fact that we live in a society now that is more litigious than it was 10, 15, or 20 years ago. The Government does not care about the fact that more people are more aware of their legal rights, whether they are fathers or mothers or whether they are people facing the sanctions of the criminal law. More people insist on their right to be heard in court, which is their right, and they do look to legal aid to ensure that that happens. There is nothing wrong with that. So when this Government says that it is concerned about access to justice, we know for a fact that under this legislation it does not care one little bit.

We see in the Family Court reforms, which this bill will have a bearing on, that this Government is rapidly reducing the right and access to legal aid for those who need it most, in a very difficult time in their lives. The point is this. The Family Court reforms are about removing access to legal representation for people when they need it most. The Government in that legislation is enacting a process that means that people will not be able to get access to legal representation and therefore will not make claims on legal aid. The one concession that has been made in that legislation will cost very little in terms of legal aid. This Government is driven solely by the savings it wants to achieve. Of course, the other aspect that legal aid has funded is counsel for the child. That is being cut. That will be much harder to get now. That is being almost totally cut, and so that will drive down the cost of legal aid.

This Government, in order to achieve its surplus in 2014-15, does not care who pays for that. It does not care who pays for its boast when it goes into 2014-15 that the books look good. It does not matter that there are people in hardship who cannot get the representation they need in court. This Government does not care about that. What it cares about is a set of figures that look good for its mates whom they cosy up to for the purposes of an election. That is all that is about—that is all that is about. This is about driving down cost and making the books look good so they can cosy up to their corporate business mates and say: “Look, we know how to cook the figures. We can cook the books and we can show a surplus.” And it will not be a surplus at all. The deficit will be in the working lives—or at least in the lived lives—of the working poor and the beneficiaries and the other low-income people in this country. They are the ones who are paying the price of this bad Government, of this immoral Government. They are the ones who will pay the price of legislation like this, which will deprive them of their rights.

The other ones who will pay the price are every New Zealander, because our reputation will suffer. We will no longer be able to go around the world and say that we are a country that understands the rule of law and understands that the rule of law means that anybody, irrespective of their means, can have access to the justice system and can be supported in doing so if they need it, because this Government is taking that away. It is taking away that support, it is taking away access to justice, and our country will be poorer for it because there will be people who will not be able to get their legal rights determined and sorted out. For that reason we are deeply opposed to what this Government is doing on legal aid, and deeply opposed to this legislation.

It is a pleasure to rise and take a brief call in the third reading of this Legal Assistance Amendment Bill and the associated bills—the Legal Services Amendment Bill, the Accident Compensation Amendment Bill, the Care of Children Amendment Bill, the Child Support Amendment Bill (No 2), the Family Proceedings Amendment Bill, and the Property (Relationships) Amendment Bill—that go with it.

These bills make changes to the way that legal aid and Crown-funded legal aid services are to be provided. I want to congratulate the Minister of Justice on bringing this legislation to the House, because the prudent and careful management of taxpayer money is a cornerstone of good Government, and that is a hallmark of this John Key - National-led Government. I am delighted that the Minister has brought this legislation to the House.

Specifically, the legislation will ensure that legal aid and the provision for lawyer for the child and youth advocacy services remain affordable and accessible in the future. The Minister has made it clear that we will be ensuring that that is the case. These changes will not affect cases involving vulnerable parties, the care and protection of children, and serious criminal matters; they will be protected. These measures are designed to get parties to resolve minor matters between themselves rather than through the courts, wherever that is possible, while making sure that legal aid is there for those who most need it.

This legislation strikes the balance between ensuring the viability of the legal aid scheme and prioritising funding to people who have the highest need within our legal system. This is very good legislation. I again commend the Minister for bringing it to the House, and I commend it to the House for very favourable consideration.

I too rise to speak on the third reading of the Legal Services Amendment Bill, with the word “Sustainability” having dropped out of the title. The reason for that is that, of course, the proposal that originally came to the House was not sustainable, and that is why we have had to drop any reference to it.

There were a number of submissions to this bill that I have referred to in various stages of the bill, and I want to particularly refer to elements of the Criminal Bar Association’s submission. But the first thing I want to do is again remind the House of the regulatory impact analysis, which provided a degree of warning to us about what happens when we do not take into account some of the potential problems that arise when we pass legislation. I do not think that after we see the implementation of this legislation—and I do accept that it is nowhere near as bad as it originally was, but that does not mean that it is perfect—we can in the future say that there were unintended consequences.

This Parliament is voting for intended consequences, and they are spelt out in the regulatory impact statement. The first of these—these are the risks that were highlighted—is that a change of purchase approach is required but is likely to be resisted by some parts of the legal profession, and this is likely to lead to an increase in a number of legal challenges of legal aid grants, as well as public concern. We have already got a tick on that one. We know that that is the case, and we know indeed that there are going to be many, many more costs associated with the increased concern around the legal challenges of legal aid grants.

Reductions in the price paid to lawyers could create gaps in provision, particularly in the family and civil jurisdictions where there is more choice of private work, and in some smaller centres where there are already supply issues. We have already seen that. I went up to Whangarei with my colleague Andrew Little, and we heard very clearly that there were issues already in that area, and I know that in other parts of the country that has been the case.

The people who will actually suffer as a result of that are not the lawyers. In fact, it is the people whom they would otherwise serve. As I said in one of the other readings—and, I think, in the Committee stage—a lawyer came before the Justice and Electoral Committee in respect of the Family Court proceedings legislation, and it was her decision to leave the law practice she was working for at the time and set up her own independent practice, because the larger firm that she worked for prior to that decided that it would stop doing all legal aid work.

She felt in all good conscience that she could not stop serving the needs of our migrant and refugee community. She felt that they would be incredibly disadvantaged if her experience was no longer available to them, and, as a result, she had to leave that firm. It was a very, very brave decision for somebody in post-earthquake Christchurch to leave the comfort of an established, well-respected law firm and set up on her own, and that is what she has done. I take my hat off to her. I felt that her submission was incredibly powerful because not only was it made to the Family Court proceedings legislation but it reached right across to this legislation here—the one that we are considering in the third reading tonight.

The introduction of income and asset thresholds for the criminal means test will be in tension with section 24(f) of the New Zealand Bill of Rights Act, providing for the right to an affordable defence. It could also delay some court cases if judges defer proceedings because of inadequate representation. We have had those examples brought to us already both in the context of this law and also in the context of the Family Court proceedings legislation. We have heard so many times about the problems that are confronted by courts that have to deal with so-called self-represented litigants. Self-represented litigants cause a real problem, often in terms of the time delays that they can cause, but also in terms of their completely unrealistic expectation of what the court is there to do. Also, they may not be completely au fait with all of the background to the particular case they may be arguing.

Restrictions to eligibility will disadvantage people on low incomes who have few options to find legal services elsewhere. Generally, this includes young Māori men in the criminal jurisdiction, and women and children in the family jurisdiction. I did notice that the Māori Party, I believe, is not voting for this bill, and I believe that this is the reason why it is not voting for this bill.

As I did describe in one of the readings—I think, in my second reading speech—we all know that young Māori men are exposed to far greater risk of being stopped in the street, of being questioned, of being arrested, of being charged, of being charged with more serious offences, of being charged with more offences, of ending up in court having to defend them, of ending up being convicted, and of ending up in jail. That is a matter of fact. I mean, it is on the record. You only need to look at it.

I know nobody likes to talk about systemic racism. It is not a judgmental statement; it is just a statement of fact. It is what happens when you have systemic system failure, and that is what we have in this country. We will continue to have it until somebody has got the courage to stand up and deal with it. The regulatory impact statement says: “Withdrawing legal aid for low income groups is likely to lead to additional costs elsewhere in the justice system. In particular, it may increase the number of self-represented litigants, with flow on costs due to delays, additional assistance required from court staff and the judiciary, and higher numbers of appeals of decisions.”

In here, in the regulatory impact statement, it does not say “as described, self-represented litigants”. It just says “self-represented litigants”. Can I just do away with that myth? This was the point that was made at the select committee on more than one occasion. These people are not self-represented. They are unrepresented—completely unrepresented. No one is standing up with them—nobody with the legal background, the experience, and the knowledge to defend their case. Nobody stands there with the legal knowledge and experience to present their case. Nobody is on their side. They are not self-represented; they are unrepresented. The regulatory impact statement stands in defiance of common sense and proper interpretation of the English language by using that term.

I want to quote from the Criminal Bar Association’s submission, because it talked about a negative impact upon the judiciary. This is the long-term issue that nobody really sees when you are dealing with a short-term problem. The Government has got a short-term problem—it wants to cut the Budget. This is about money; it is about nothing else. Here is a quote from the Lord Chief Justice, Lord Judge: “The longer-term problem arises in the context of legal aid, which we are talking about now. I am not going into the whys and wherefores of the legal aid issue in terms of cuts, but can I just address one long-term consequence? A lot of people working in the criminal world and on family work do so on the basis of legal aid. There are shining men and women who go into the commercial court world. They do fine—they do the Chancery Division. But an awful lot of the judicial work at the coalface—the sentencing of the rapists; the trial of the terrorists; and so on and so forth—is done by people whose background is legal aid criminal work, prosecuting criminal cases and family work.

If we cannot attract young men and women of real talent into doing criminal and family work on the basis of what is available on legal aid, we shall lose a significant part of the practising Bar, which is from minority ethnic backgrounds and women. If we lose them or don’t collect them, in 20 years’ time the Judicial Appointments Commission will have fewer applicants from these backgrounds than they have at present, which will in its turn stultify the progress towards a more diverse judiciary. I see those two questions running side by side, although one is a much longer-term problem.”

Nobody has talked about the longer-term impact on our entire legal system when we actually discourage those whom we need to be encouraging into taking up these positions. That, unfortunately, is one of the unforeseen consequences of this legislation.

It is no great pleasure to speak to the third reading of this legal assistance legislation. There is a great deal one can discover about the legislation simply by looking at the evolution of the naming of the legislation, which, of course, started out in life as the Legal Assistance (Sustainability) Amendment Bill and has now been divided into a number of other bills.

The reason why that name was dropped and why the word “Sustainability” dropped out is quite remarkable, and it is reflected in the report back from the Justice and Electoral Committee. This is not the minority report; this is actually the report from the majority—from the Government members. The recommendation in that report recommends a change in the name of the bill to the “Legal Assistance Amendment Bill”. It goes on to say: “The intention of this change is to reflect extensive amendments proposed to the bill in response to submissions.” That is a good thing for a select committee to do, clearly, but it goes on to say: “These proposed amendments reflect the refocusing of the bill on the outcomes for legal aid clients, rather than solely on the financial savings to be achieved.” I commend the honesty in that statement, but what an extraordinary admission for a Government to make—that, in fact, this bill was first drafted solely in order to save money, to make some short-term financial cost saving with no thought to the outcomes for legal aid clients, those people who are in need of the services in order to see that they are fairly represented in court.

As I say, that is a very honest and open admission, but it just reflects a very narrow scope, a lack of an integrated approach to lawmaking. Sadly, it is a theme that runs through a great deal of the legislation we are seeing from this Government: an absolutely singular focus on cutting costs in the short term with no recognition of the longer-term consequences of the fact that, in fact, you are making false economies and that saving a dollar in one place is very likely to lead to increased cost elsewhere. And it is not only financial costs. In this instance the social cost, the cost in terms of access to justice, is simply unacceptable. It is a very thoughtless piece of drafting, focused on that singular attention to saving money, and that is a very poor way to make legislation.

The fact is that the original drafting contained what is known, of course, as a “Henry VIII” clause—that is, effectively a power for the Minister to actually change the law, to make amendments in a way really to exercise the power of Parliament. Again, to me, that reflects—with no ill will towards the drafters, clearly, those very hard-working officials who do the work—the fact that the public sector is being driven down to a point where it is scarcely able to fulfil its core functions. Again, it is this short-sighted, narrowly focused cost cutting, which simply leads to poor outcomes in the longer term.

Access to justice, clearly, is going to be limited by the fact that people will increasingly have difficulty getting access to legal aid. In respect of the fixed fee that is introduced in this legislation—the application charge of $50 or so—we know that will mean there will be fewer companies who are actually interested in providing legal aid services. We are hearing this already from larger legal practices—that they simply will not bother with legal aid work. I think within the legal profession there is a degree of corporate responsibility. There is some pro bono work done and all that, but, frankly, these people are running businesses, and on the fixed-fee scale that is proposed in this legislation or regulations, it simply will not be worth the candle for companies to involve themselves. There will be increasing demand for legal aid, a reducing supply, and fewer people who are able to get the representation in the courts that our constitutional basis really requires that they should have.

We will get this very unfortunate situation. We will have the best access to justice that money can buy. The quality of the representation people will receive in courts will be a function of their ability to pay for that. That is a very unhappy situation for New Zealand to be in. This country over the last 20-odd years has seen a widening inequality gap: a few people are doing very, very well and more people are actually not doing well at all and, in fact, are struggling simply to survive. Some members may have seen a presentation earlier this evening on a new book, edited by Max Rashbrooke, that has been published recently called Inequality: A New Zealand Crisis. Chapter after chapter describes how across the board in society in all sorts of sectors and all sorts of ways that inequality gap is opening up in New Zealand. And now we are seeing unequal access to justice, and that is simply unacceptable in a modern, liberal democracy.

We know that as that inequality gap widens, it disadvantages not only those at the bottom but even those who are best off in that situation financially. They are actually overall worse off because the quality of the norms of society degrade, and that is to nobody’s advantage. Everybody is worse off as we allow this inequality gap to expand and to open further. Unequal access to justice, unequal access to representation in our courts, is a serious matter. Unfortunately, this legislation makes that situation worse.

We have heard from one member at least who talked about this legislation striking a balance between saving money, cost cutting, efficiency—however you like to describe it—and access to justice. In fact, this legislation fails miserably in terms of balance. It is very unbalanced legislation. We can go back to the original point I made. The point of this legislation is to cut the cost, to take dollars off one or two lines in the justice budget, not actually accepting that what we are really doing is relocating cost. We are saving money in one point; we are upping the cost somewhere else. A lot of that will be felt by the most vulnerable, by the poorest. It will mean fewer people get decent representation, more people stay longer in the justice system, and an increase in people being convicted, paying fines, even being imprisoned, who ought not to be, arguably. This is a very poor piece of work. It is not a balanced approach to lawmaking. It is not a balanced approach to justice. The Greens will continue to oppose this.

Debate interrupted.