Legal Services Amendment Bill

I present a legislative statement on the Legal Services Amendment Bill.

💬 SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.

I move, That the Legal Services Amendment Bill be now read a first time. I nominate the Justice Committee to consider the bill.

For our justice system to function as intended, people need to be able to access justice, but for some people, the costs that come with getting legal advice and having legal representation prevents them from being able to participate. The legal aid system is designed to help those on lower incomes to ensure that they are not disadvantaged by being unable to afford legal representation, but we know that aspects of legal aid mean it is out of reach for some New Zealanders.

The Government is committed to improving access to justice. This bill honours that commitment by removing the additional costs of accessing legal aid, the user charge and interest payments, which we know can be an absolute barrier to accessing legal aid.

Firstly, I’d like to discuss the user charge. Currently, some people who successfully apply for civil legal aid are charged a $50 fee, also known as a user charge. Fifty dollars is more than double the minimum wage, meaning it would take someone working at the minimum wage at least two hours just to pay this initial charge. For some, the $50 user charge may mean they have to decide between groceries that week and getting assistance with their legal issue. The bill removes the requirement to pay the user charge from the Legal Services Act. It is a charge that is simple to remove, but that will make a big difference for legal aid applicants.

Next, I would like to address the issue about the payment of interest on unpaid legal aid debt. Currently, if you have legal aid debt that is unpaid six months after your case closes, you are charged an interest rate of 5 percent per annum. For some families—particularly those who owe multiple debts—5 percent interest on legal aid debt has served to penalise them for not being able to afford to repay their legal aid debt properly. This bill removes the requirement to pay interest on unpaid legal aid debt. Not only will this provide stress relief to those who are facing it but it will save people from paying more money than necessary to get support that is often absolutely necessary for fair participation in the justice system.

I want to point out that the removal of the user charge and interest payments will already be in effect before this bill passes. Amendments to the Legal Services Regulations make the practical changes by making the user charge zero and the interest rate zero. What this bill does is remove references to the user charge and interest payments from the Legal Services Act—references that will already be redundant after 1 January 2023, once the regulations are changed. The changes in the bill make the abolishment of the user charge and interest rate a more enduring change, giving certainty to legal aid recipients that they will not be required to pay those debts when they are granted legal aid.

The justice system can be a stressful place for people who are not familiar with it, and financial barriers and the stresses that come with that can make the experience much more overwhelming than it already is for many New Zealanders. I know there is more to be done to improve access to legal aid, but I also know that the changes this bill is making right now will make a real, tangible difference to lower-income New Zealanders using legal aid to access justice, which is why I am incredibly proud to be commending this bill to the House today. With that, I commend this bill to the House.

The question is that the motion be agreed to.

Thank you, Mr Speaker. Firstly, can I acknowledge the Minister for bringing the Legal Services Amendment Bill to the House. We had a long discussion about this—her opening comments I entirely agree with. One of the most daunting things and one of the biggest barriers for a lot of people actually engaging in our justice system and the courts is that you’ve got lawyers and people in the legal profession and you’ve got judges that speak a whole different language. You’ve got a system that a lot of laypeople, when they engage with it, don’t really understand what’s going on. And they’re feeling like they’re losing control of decisions and processes in their own lives. So we acknowledge that, and we would much rather see a substantive bill or some substantive work done across the House because we would support this.

I’m not laying the blame entirely at the feet of the Government, although, of course, we know that we have got massive backlogs now in our system and that has a massive negative impact on people’s lives, particularly when you’re talking about the Family Court and parents that are separated from their children through no fault of their own, only because you’ve got two adults and two parents that can’t agree, and they are immersed in a system whereby it can take literally years to get resolution, to actually get access and start to try and repair and get that family back on track in terms of the relationship for children between both parents.

So we know we’ve got big fundamental issues and problems inside our courts and inside our justice system. We’d rather see a substantive bill come to the House to actually start to deal with those issues, because we believe that that’s actually where most of the stress actually sits for laypeople and for people trying to navigate their way through our court system. We want to understand exactly what the intent of the Government is here, removing a $50 legal fee. We’re not fundamentally against any of this as long as the Government can show us exactly what they think they’re going to achieve, exactly the stress that is going to be removed. They say there’s obviously the ability to remove financial stress, but the current legislation already allows for that. It already allows for the application pertaining to the exemption of legal aid debt under the grounds of the financial hardship. If we are going to remove interest on that debt, what is the Government’s position on that? Is it the fact that now there’s no expectation that that debt will be repaid? Will removing the interest on that debt provide a greater incentive for people to actually pay that back, which ultimately is taxpayers’ money, or will it just remain the status quo?

I think those are some of the things that we need to answer through the select committee process and we will work, as always on the Justice Committee, in as bipartisan way as we can to at least try and identify exactly what this bill is going to achieve. At the moment, we can’t see that. We can’t see the immediate value in that, we can’t see exactly what they are trying to achieve, and therefore we can’t support the bill in its current form, although we are committed to working on the Justice Committee to find out exactly what is trying to be achieved and whether or not this is actually a substantive bill that’s going to make a real impact, or whether it’s something along the fringes that isn’t. Thank you very much, Mr Speaker.

Thank you very much, Mr Speaker. Well, it’s disappointing to hear the National Party won’t be supporting the bill. Some of the changes to the legal aid system made under the previous National Government caused thousands of New Zealanders many obstacles in order to access justice. So this is a bill designed to remove those obstacles. The Legal Services Amendment Bill repeals sections of the Legal Services Act from back in 2011 that require the payment of a user charge and interest on unpaid legal aid debt—pretty clear to me.

The proposed changes will mean thousands of New Zealanders who would otherwise not be able to afford a lawyer will be able to have proper legal representation. The justice system can be a stressful place for many people who are not familiar with it—financial barriers and the stresses that come with them make the experience much more overwhelming than it should be. The bill responds to the Ministry of Justice findings from back in 2018 on legal aid. Budget 2022 provided $148.7 million to strengthen the legal aid system. We will continue to make improvements to the justice system so everybody in New Zealand has appropriate access to justice. I commend the bill to the House.

Thank you, Mr Speaker. The previous speaker referred to the basic sort of concern around access to justice, which I think everybody in the country, and certainly in the Parliament, is very focused on. If you think about the justice sector more broadly, what are the challenges that we really need to be focused on? It’s around dealing with violent crime more effectively, dealing with youth crime more effectively, and then, third, actually speeding up the process of the courts, which is taking years for people to get access to justice. Unfortunately, there’s not much progress being made on any of those three key areas. But we see a plethora of bills coming from the Government on bits and pieces that may or may not help with those overall challenges that we face.

There’s no question that legal aid is a system that is not working as well as it could do. It’s far from clear to us that reducing the small barrier in terms of the $50 fee will help with that particularly, and, certainly, doing away with interest on loans will only encourage people not paying them back in any great haste. I’m not sure whether they are the right places to be focusing the Government’s intention. Actually trying to speed up the process so that people can get on with their lives more quickly, and dealing with the broader context of crime so that we have fewer victims of crime in the first place, I think would be a better area for the Government to be focused.

So we’re far from convinced that this makes sense, this legislation. In fact, when you look at the detail, it’s very light, indeed. In fact, it seems like this has just been thrown together without a great deal of thought whatsoever. So we’ll be interested in the select committee process to hear from the broader sector. But our general impression from looking at this piece of legislation is that the Government doesn’t really have its eyes focused on the big issues in justice that need to be resolved more swiftly. I wish and encourage the Minister to get herself focused on those issues today. Thank you.

Thank you, Mr Speaker. We had a saying in Community Law which went, “The opposite of poverty isn’t wealth; it’s access to justice.” Legal help must be affordable for it to be accessible. I give my Opposition colleague some advice: there was a wonderful series that RNZ ran in the summer of 2021-2022 called Is this Justice? They covered a number of people including a young man who was bringing an employment claim that left him significantly in debt, with a caveat over his house. So this does really put some people who are trying very hard to raise valid legal claims in an extraordinarily difficult, complex space.

One of my colleagues on the opposite benches spoke about existing provisions in the legislation. They are there. However, as Frances Joychild KC notes, to have legal aid debt written off is very, very rare. She says, “The person has to be dog poor, just about living in emergency accommodation with nothing, to get it written off.” There is very much a need, and I commend this bill to the House.

Thank you, Mr Speaker. As, I think, the only member of the criminal bar in this House, I—

💬 Dr Emily Henderson: No.

No—someone else is a member of the criminal bar over there. I did just get a text message from the Ministry of Justice asking me if I was available for urgent criminal matters between 24 December and 9 January, which I will not be.

But maybe I’ll say: as the only member of the House who was in court the day the Court of Appeal heard the case against the National Party’s legal aid policy, that’s reflected in this bill, when it was found to be unlawful. It was found by that court that the then justice Minister, the Hon Judith Collins, had adopted a legal aid policy whose focus went outside of the discretion afforded by the Legal Services Act. The purpose of the Legal Services Act, which affords that discretion, is limited to providing high-quality legal services to accused persons who can’t afford it. It was found that the National Party’s legal aid policy was focused on saving money.

💬 SPEAKER: Yeah, I don’t think the member should be referring to it in that manner. If it’s a law that is passed by this Parliament, then it’s the Government’s policy or Act.

The legal aid policy was adopted only by the Minister, so it was a discretionary policy. But I will move on from that.

The point of this bill is to return our legal services and our legal aid policy to a point where the focus is providing high-quality legal services for those who can’t afford them, without this added cost and this added purpose of past legal aid policy that was to make money for the Government at the same time. That’s not part of what legal aid is for.

Access to justice—which people who qualify for legal aid have shown they are deserving of—for free should not include an interest that makes money for a Government. It never should have been about that. People shouldn’t be remortgaging their homes because they face a really lengthy criminal trial, but that’s what’s happening in this country.

And the other thing that we need to remember is that this bill is about victims too. So it is shocking to see the Opposition—who go on and on about the rights of victims—voting against this, because, actually, this interest and this fee apply to those applying for protection orders in the Family Court. So why—why—should a person who has proven that they can’t afford legal services and who needs a protection order be paying interest forever, maybe? She’s already proven that she doesn’t have a lot of income. Our legal aid bars are set very, very low on income. So what isn’t she paying for as she pays this interest to us, as the Government?

This bill brings us a little bit further in line with what our legal aid policy should be about, which is access to justice. And legal aid is provided everywhere else that we compare ourselves to on human rights and on access to justice issues—not with another weird, little, added incentive of Governments making money. It’s just legal services. You get to choose your lawyer. You get to go to court. You get to have a defence. You get to apply for your protection order with access to legal aid. Why was there ever a provision that was focused on making money off of those people, off of those services, off of that access to justice? It was always shameful for the Government who introduced it.

This brings us a little bit back into line. But what we need to see is reform of our legal aid services and legal aid policy to bring it fully in line with what the court found. That decision still stands.

Legal aid needs to be free. It needs to be far more accessible. People need to be able to choose their lawyers, which they mostly can’t in this country. Lawyers need to be able to bill the time that they spend, rather than be incentivised to spend less time on cases with caps on legal aid.

So this is a first step that I do commend to the House. But I am very disappointed in the Opposition for leaving out those who need access to justice—including victims—from being protected against this weird cost. But I am hopeful that the Minister, the Hon Kiritapu Allan, will continue this work on reforming legal aid. So I commend it to the House.

Thank you, Mr Speaker. I stand on behalf of the ACT Party to support this Legal Services Amendment Bill. This bill came about after a legal aid review back in 2018, and the setting has largely been unchanged since 2011. And what this bill will do is remove the user charge as well as the penalty interest requirements that are placed on those that need and use the legal aid facility. It will change the income eligibility thresholds by 15 percent, and that’s going to start on 1 January 2023. It will increase the debt repayment thresholds by 16.5 percent for debt established also from the beginning of 1 January 2023. It will increase eligibility and debt repayment thresholds by an additional 1.9 percent per year for the next three years.

So what does this mean? Well, in 2013, the user charges were introduced. This meant that every person who uses legal aid had to pay $50 in order to have that privilege, and that was for most civil and family legal aid applicants. Some also have to pay a portion of their legal aid grant back. And, as has already been canvassed amongst this House, there are many people who have caveats upon their property, caveats upon their homes, for just trying to get access to justice. While we can say that it’s OK to do this, it’s actually not when it ends up that families, especially children, become affected by the fact that there are caveats over homes, especially if it means the inability to seek second mortgages, which could be needed, especially at this time, during a cost of living crisis. It’s estimated that there’s going to be 100,000 people who became ineligible between 2013 and 2018, but about 98,000 people will become eligible for legal age once these thresholds have been moved and changed at the beginning of next year.

Of note is how much debt has been accumulated in the short time since 2013 when the $50 user charge and interest payments were made. Currently, there are 52,500 individuals that owe $178 million to the Ministry of Justice. Those that needed help the most, because they had no money to pay for legal assistance, are the ones that are suffering with this massive debt. By dropping the user charge and penalty interest requirements, the Crown does lose some revenue. It’s not much, on the bigger scheme of things, to the Crown, but it’s a lot to the estimated 7,500 people who will benefit each year, and it’s those that are on low incomes.

On the face of it, this looks good. But when I was reading the departmental disclosure statement, I found a few things that I thought were quite alarming. Because we’re doing this under urgency, and the review was in 2018, I thought that there would be more policy information around the bill available, but there’s been no inquiry, no review, or evaluation done. The Treasury document, the regulatory impact statement, I’ve only just found on the Table this morning. I could not find the cost-benefit analysis, I could not find the Auditor-General’s New Zealand Bill of Rights Act report, and it appears, from the departmental report, that the Ministry of Justice have not even been consulted. And, in fact, Budget confidentiality means officials couldn’t consult on any of the policy proposals. There’s been no testing or comparisons to test provisions, and no retrospective effect has been confirmed either.

So this bill looks good. It addresses the expense that some of our most vulnerable actually cannot afford. It provides access to justice for many people, and that access will increase once this goes through, because those thresholds would have also increased, and it will, of course, decrease a lot of debt for many, many people. But I’m surprised that under urgency, the departmental statement is not complete. This is not sound policy work.

So I like the idea, it’s good, but we need to make sure that when we make good ideas law, they need to be good law, and that includes having all of the data and evidence behind you to make sure you can make good decisions. So the idea is good, but good law is made when the i’s are dotted and the t’s are crossed and the policy goes through its full process.

So we will support this good idea, that will help those most vulnerable during this cost of living crisis and expected recession that is nearly upon us. But I guess we look at the policy further and its implementation during the select committee process, because that’s our only chance to delve into the documents that are missing from the Table from the website, and from this bill. But the idea is good, and that’s where we need to start if we can work together across the House to be able to provide good access to justice for those that deserve it.

And so the ACT Party will support this bill through its first reading, and I look forward to working with the Justice Committee to flesh out the issues that we may find, and make a better piece of legislation for those that will be affected from it, and for it, come 2023. Thank you.

Tēna koe, Mr Speaker. You know, anyone following along to the House this morning would be forgiven for being a little bit confused about this. Every speaker in this House has stood up for access to justice. Everyone in this House believes that in a fair and just and democratic society, one of the most fundamental things is that we need to be able to access justice so that we can preserve our rights, so that things are fair for us, whatever we think those rights-balancing exercises may be. So they might be a little bit confused to hear the ACT member Nicole McKee, who is a very sensible member, talk about this bill as a good idea that she supports, and then for the National Party to oppose it. It doesn’t make sense.

Victims use this fund. Families in the Family Court use this fund. To be charged $50 as a user charge does not have a policy rationale anymore. It’s simply a barrier to access to justice that this Government is getting rid of and we’re being opposed in this debate for opposition’s sake. I really hope that we can come together in the select committee and find a way through this in a consensus-based approach, because it doesn’t make sense not to support this bill.

Harete Hipango—five minutes.

Thank you, Mr Speaker. I rise and take a call as a duty member of Parliament for the National Party. I acknowledge the contributions that have heard around the House in this debate on the Legal Services Amendment Bill. I preface my call by saying there are members in this House who have practised as lawyers, applying for legal aid for clients. So I stand in the position of drawing on my former skills as a lawyer, advocating a position, taking instructions from a client despite advice being given, but still taking instructions.

The position has been made clear that at this time—and I follow on from the contribution of my colleague Mark Mitchell—the National Party takes the view at this time that this bill could have addressed things in a more substantive and wider-reaching way in terms of addressing access to justice.

I said that I was drawing on my advocacy skills as a former lawyer, having taken instructions from clients and advocating a position, and the position I’m advocating at this time is that the National Party does have concerns. Certainly, the intention is proper. It is a just one. Again, standing as member who sat on the Legal Services Agency Board back in the early 2000s, through the introduction of the Legal Services Act and all the procedural requirements and operational aspects associated with that, I’m fully cognisant of the importance, particularly for our vulnerable communities and persons, of access to justice.

Often the incursion is about the ability to be able to afford good legal representation and good legal services and part of having a legal services or legal aid lawyer is that the State provides the funding to be able to have good legal representation.

I’m also standing in the capacity of having been a legal aid lawyer for clients in the Family Court, in the mental health courts, and in the criminal court. Had my clients not had the benefit of legal aid, one questions whether they would have either been self-representing or been at the disadvantage of the system through not having a lawyer appointed through legal aid. I certainly acknowledge the contributions from Minister Allan, the Minister of Justice, on the relevance of this bill. The National Party is opposing it at this stage. It will go through its proper due process of scrutiny at the select committee, and we will hear submissions from those persons who have been afflicted and affected by legal services fees and the initial $50 fee contribution and how it does impact people.

I also pick up on the comment made by the ACT member Nicole McKee in terms of the fact that the departmental disclosure statement is not complete and that despite the intention of good policy, it still needs to be examined in terms of how robust is the evidence in support it. That is what the select committee will do. It will hear, importantly, from members of the community in terms of how this has impacted on them in terms of the fees that have been required to be paid back, and with the additional interest that’s charged on that. But for many people the challenge and the difficulty they have had is that initial contribution of $50. And, yes, as lawyers there are many of us in this House who have practised legal aid and have had to make an application for that fee to be exempt.

This bill will go before the select committee. It does have the numbers at this stage to get to the select committee and come back for the second reading with more substantive information from that departmental disclosure statement, from the regulatory impact statement, and, importantly, from members of the public who have been affected by the imposition of the requirements under the Legal Services Act.

Kia ora, e te Mana Whakawā. This bill supports access to justice. The National Party appears to oppose that. I certainly do not. I commend this bill to the House.

Kia ora e te Māngai o te Whare. It is hugely disappointing to find that the National Party are not supporting this bill. I am surprised there is any lawyer or ex-lawyer who could possibly consider that it is in the interests of justice for us to continue to charge this application fee or to continue to charge interest.

As an ex-lawyer of both the criminal court and the Family Court over many years, I am aware of my many colleagues—and on occasion, myself—who have not only applied for exemptions constantly but also actually paid the fee ourselves in order to allow our clients to apply for much-needed cases over relationship property, over custody, and over employment, as we have heard. This bill absolutely necessary to undo the damaging policies of previous Government. I am very pleased to say, ka mihi ahau ki tēnei pire ki te Whare [I commend this bill that is before the House].

Look, thank you, Mr Speaker. The National Party continues to oppose this bill—as much to send a signal to the Government about rushing through legislation without proper consideration, oversight, and transparency. We anticipate it will go through to select committee, which will be a good chance to try and interrogate some of the themes here.

Look, we all understand there are difficulties accessing justice—and, yes, expense is one of them. I think it’s probably rather important to note to the House: people do not lose access to justice because of this. The very fact that there’s interest on an unpaid fee indicates people don’t pay the fee but still get the service.

Now, that’s still a bit of an issue there that needs to be addressed, but when you look at all the issues we are facing in society today—including the murder of a dairy owner, constant ram raids, violence, attacks, assaults in the community. We had just one of my young people—the father’s been in touch with me—who was attacked the other day. Fortunately she knew karate and gave the guy a kick in a place that you’d want to give a guy a kick in, and she got away.

But long and short, there’s a lot of crime and activity. This bill, whether or not noble, is hardly the highest priority, I would think, of a Government needing to address a surge in crime. So, as we say, at this point, as a signal, National is opposing. But I presume it will make the vote and get into select committee, and we will interrogate it more there.

Thank you, Mr Speaker. I’m pleased and proud to stand to take a call on the Legal Services Amendment Bill today. This is a great bill. It removes a user charge that currently prevents access to justice, therefore increasing access to justice for New Zealanders, which I think we can all agree is something that the whole House should agree on.

I do want to respond briefly to the members on the other side. I do feel a slight warming towards this bill and so I hope that when it is referred to select committee we can all agree to support it. And I commend it to the House.

The question is, That the

Motion agreed to.

Bill referred to the Justice Committee.