Legal aid spending climbs, Government seeks efficiencies in review

NZ Herald

16-05-2025

Nicola was thrust into the thick of a property split and custody arrangements.
It was daunting, confusing and terrifying.
'I literally had nothing. All I could hold on to was the fact that half of the house was mine, and I needed a lawyer to fight for me.
'I had no idea what it even meant to get a lawyer, but I just knew that's what needed to happen.'
Nicola's case formed one of 20,000 legally aided Family Court cases last year - the highest in a decade and 7% more than the previous year, according to Ministry of Justice data.
These cases consumed $70.2 million of the $270.2m legal aid expenditure last year, which was 68% more than 10 years ago.
The Ministry of Justice said that figure excluded the duty lawyer service, police detention legal assistance, and family legal advice service, which meant the total expenditure was $285m.
In the last financial year, legal aid grants were distributed to 1380 firms whose legal aid providers undertook work on a range of cases in the criminal, civil and family courts and several specialist courts and tribunals, including Waitangi Tribunal claims.
Criminal cases consumed by far the largest portion of the legal aid budget, and last year they cost the taxpayer $165.5 million - a 185% increase from a decade ago.
One of the highest amounts paid out for an individual in New Zealand's legal history was the defence of David Bain, which cost more than $3.3 million in legal aid.
The former Dunedin man was convicted in 1995 of murdering his parents, two sisters and brother and spent 13 years in jail before being acquitted in a 2009 retrial.
Other more recent high profile cases funded by legal aid include Mama Hooch rapist brothers Danny and Roberto Jaz. It was reported in 2023 that taxpayers footed a legal aid bill of almost $900,000 for their defence, and the cost was expected to rise with appeals.
South African doctor, Lauren Dickason, who was found guilty of murdering her three young daughters days after the family had arrived in New Zealand, received at least $709k in legal aid for her case.
Meanwhile, there were 208 claims lodged with the Waitangi Tribunal last year, which were legally aided to the tune of $19.4m.
At the same time, 11 times more grants were given to cases in the civil court than in the Waitangi Tribunal, but they cost $4.5m less.
The Government will soon begin a review of the legal aid system, to be conducted by the Ministry of Justice, aimed at finding where costs might be trimmed over the next four years.
Justice Minister Paul Goldsmith would not be drawn on the specifics of what was driving the need for a review, but told NZME it was about ensuring New Zealanders have timely access to justice.
'We have a duty to ensure those who cannot afford a lawyer still have access to legal advice and representation,' he said.
The review announcement followed last year's Budget, which provided no further investment in the scheme.
This prompted concern from the New Zealand Law Society, which has been advocating for years for the fair remuneration of legal aid lawyers and the improvement of their working conditions.
Advertisement Advertise with NZME.
The Law Society said that without fair remuneration, the number of lawyers willing to provide legal aid would continue to drop, and therefore diminish a service described as performing an essential role in society.
Senior lawyer Jeremy Sutton says fewer lawyers like him are now putting their hand up to do legal aid work, because of all the work it takes - the administration and sometimes challenging people to work with, for low fees.
'Unfortunately, you're not getting as many senior lawyers who are doing the family legal aid.
'So for my senior level, and I'm on the most senior level, it's $134 an hour. Some of it's fixed fees and some of it's not,' Sutton says.
He says legal aid work was mostly charged on a fixed fee basis, meaning a set fee that was paid to the lawyer.
Some of the more complex legal aid work was paid on an hourly rate, which was typically about $100-$134 plus GST.
Sutton says the average hourly rate for private work varied, but it was about $300 to $400 an hour plus GST for an experienced lawyer.
'In some cases, it is hard to find people who will do legal aid for matters such as family violence, which means that you often get less experienced lawyers who are doing the work.
'This can cause issues for access to justice.'
He says relationship property was another area in which family lawyers were reluctant to undertake legal aid.
'This is because the fixed fees are significantly less than you would recover under an hourly rate.'
Sutton says what then happened was a tendency to see people representing themselves, which added pressure to the court system.
Nicola says that until last year, she didn't know what legal aid was. It was the lawyer representing her who told her about it and who applied for it on her behalf.
Lawyers have to be granted authority to provide legal aid services. It requires a robust application and authorisation process via the Ministry of Justice channels.
Nicola says she's glad it was available; otherwise, a large portion of her share of the family home when it was sold would have been eaten up in legal costs.
However, legal aid is not entirely 'free', depending on individual circumstances.
The Ministry of Justice describes legal aid as a loan, and anyone who receives it may have to repay some or all of it. That comes down to how much someone earns, what property they own and whether they receive any money or property as a result of their case.
The ministry's national service delivery group manager, Tracey Baguley, says the requirement for some people to repay legal aid has always existed.
The Legal Services Commissioner and their staff use information supplied on the application form to calculate whether any amount is to be repaid.
Baguley says they take into consideration the seriousness of the charges, any dependent children, the amount of debt or any other exceptional circumstances.
Repayment amounts are calculated for each person based on income thresholds. Prescribed repayment rates are set out in law, which also provides for the Legal Services Commissioner to decide whether or not to recover debt or to write off amounts payable.
Some exceptions prevent a repayment being set, Baguley says. For example, applicants in most domestic violence cases only have to repay legal aid in exceptional circumstances.
Treaty claimants can apply for legal aid irrespective of their financial circumstances to help cover the cost of legal representation, travel, meals, accommodation, and attending hui.
In practice, Legal Aid Services does not seek repayment from Waitangi Tribunal applicants, Baguley says.
According to information provided to NZME from the Ministry of Justice, from July 1 2019, to June 30 2024, $114.3 million has been repaid to Legal Aid Services following an established debt on a legal aid grant.
Total repayments across the Civil, Criminal and Family Law jurisdictions showed repayments have risen from $12.2m in 2019-20 to $32.1 million last year.
An individual could also apply to have their legal aid debt written off, Baguley says.
In Nicola's case, her legal bills ended up being heavily subsidised by legal aid after she had to repay $4000 based on what she ended up with after the property division.
'Because I got the money from the house, I needed to pay some of the legal aid back.'
She claims the repayment amount might have been higher if she had continued fighting for the share of her former husband's superannuation to which she was entitled.
Advertise with NZME.
Nicola made the call early to cut her losses rather than head to court, and potentially lose more of her share of the capital from the house sale.
It's a decision she doesn't regret, as it has also freed her to move on.
'I couldn't work while I was getting legal aid, and I understand that, but I was also like, 'I need to move on with my life - I can't just keep fighting with this person'.'
The number of firms that received more than $1m a year from the legal aid budget has jumped 254% from what it was five years ago.
In the year 2019-20, 11 firms received more than $1m in legal aid grants, and last year, there were 39.
The top five recipient firms last year each took more than $2m in legal aid grants.
However, the head of a Nelson law firm that last year took $1.3m in legal aid grants, ranking it 22nd out of 1380 firms receiving such grants, warned against looking at the figures as being what firms 'earned'.
Steven Zindel, a long-time advocate for fair and equitable access to justice for all, said about half of legal aid spending was on disbursements, including 'expensive experts' like psychologists required to help write reports, who could 'charge what they liked'.
Quoting from an article in the country's legal news weekly summary publication, Capital Letter, Zindel said last year, disbursements made up $147.5m of the total cost of legal aid.
The year before, disbursements formed $131.8m of the total legal aid expenditure and five years ago it was $111.9m.
According to Ministry of Justice data collated by NZME, nine firms stood out for having received the most in legal aid grants over the past five years.
Auckland firm Tamaki Legal ranked highest, having claimed a total of $14.3m from the legal aid pool since the year 2019/20.
Advertise with NZME.
The firm's principal, Darrell Naden, told NZME that most of the cases it handled were legally aided, and most concerned Treaty claims to the Waitangi Tribunal.
Claims in this tribunal are around allegations that the Crown has breached the Treaty by particular actions, inactions, laws, or policies and that Māori have suffered prejudice as a result.
The total number of tribunal claims jumped from 63 a decade ago to 208 last year.
The cost has gone from $13.8 million 10 years ago to $19.4m last year - a 40.5% increase.
That means 208 tribunal claims last year consumed $19.4m of the legal aid budget, next to 2418 civil claims, which cost $14.9m.
Naden says the goal of his law firm in providing legal aid services was in the interests of social justice.
'A growing number of people cannot hope to pay privately for legal services.'
Naden believed that, for the most part, the legal aid system was administered efficiently, but agreed with Sutton's comments that fewer lawyers now did legal aid work because of the paperwork involved and because of the low hourly rates.
'The hourly rates should be at a level that incentivises lawyers to take legally aided cases, and the administration burden on running a legal aid file should be addressed.'
The New Zealand Law Society is on record during an earlier, substantial reform of the legal aid system and its funding, that Treaty cases should be funded separately from other legal aid work.
Today, it declined to be drawn on whether it still stood by those statements, only that they related to circumstances as they were at the time.
'Since 2010/11, the legal aid system has changed considerably.
'For a range of reasons, it is criminal and family legal aid that has experienced the greatest increase in expenditure,' a law society spokesperson said.
Despite approaches to several iwi organisations and entities including Tainui, Ngāi Tahu and Wakatū Incorporation, plus experts and academics in the field of Māori law, none have responded to NZME's question of the importance of legal aid being available to claimants in the Waitangi Tribunal.
Goldsmith says public consultation on the review of the legal aid scheme will begin shortly.