KEY POINTS:
Something is seriously wrong with the way in which new legal aid laws are being applied.
The changes took effect last year and were designed to ensure that people who could not afford to pay lawyers did not miss out on legal representation.
New Zealand introduced a legal aid system in 1969, and the income criteria for obtaining legal aid had remained exactly the same since.
What this meant was that people earning over $19,060 a year were considered too rich to need legal aid, and had to pay for lawyers themselves.
The Government was aware that many people were falling through the cracks as a result, and the Legal Services Amendment Act 2006 aimed to remedy that.
Then-Justice Minister Phil Goff said that the legislation would restore to a wide range of lower-income New Zealanders the ability to afford legal representation by increasing the number of people potentially eligible for legal aid from 765,000 to 1.2 million.
The quid pro quo for that was that far more people granted legal aid would be required to repay it than had been the case in the past, making aid more like a loan than a grant.
Unfortunately, what is happening in practice is not fulfilling the Government's intentions.
That can be illustrated by two cases I have dealt with recently in which people have been refused legal aid.
In the first one, a man had been on a benefit for five months, had worked for three months earning $14.50 an hour, and had been without income for the other four months of the year.
His annual income was accordingly well below even the old legal aid income threshold of $19,060.
However, the Legal Services Agency looked only at the fact that he had been employed for the most recent three months of the year, extrapolated from this that he would continue to be employed, and decided that he could afford to pay for a lawyer himself.
In the second case, a man had worked for part of the year and earned $700 per week.
He had then lost his job and had had no income in the six weeks leading up to his court appearance.
He was refused legal aid because the agency chose to take account only of his income during the period in which he was in work.
I have been advised that the income criteria are now in fact stricter than they were under the old law.
That is plainly not what the Government intended in passing the new legislation.
A second major problem with the way in which the reforms are operating relates to repayment requirements.
People on benefits and extremely low wages will be granted legal aid and will not be required to repay it.
However, anyone considered to be slightly better off will receive a letter requiring repayments of a specified amount per week to start immediately.
These letters are totally inaccurate, and are causing concern to clients.
In some cases clients advise lawyers that they no longer wish them to act when they receive the letters, as they are so alarmed at the sum it is suggested that they will have to repay.
In fact, however, the repayment figure set out in the initial letter is several hundred per cent higher than the client will be required to pay.
At the end of the case, the client will receive a further letter with a far lower repayment amount.
However, it is virtually impossible to explain to people that they should not worry about receiving a bill for thousands of dollars because they will not actually be called on to pay that.
One example is a man whose initial letter said repayment would be $4420, when the final figure was in fact $225.
The Legal Services Agency may also be in breach of consumer credit laws. People signing legal aid applications are not told what interest they may be charged.
Any other New Zealander entering into a consumer credit contract is specifically required by law to be provided with those details.
The Legal Services Agency sent a letter last year to some lawyers saying that it had received legal advice that it was in breach of the law, but has refused to release details of the exact nature of those breaches.
The agency is apparently arguing that consumer credit protection laws do not apply to legal aid grants.
This is an unfortunate stance: it appears that those at the bottom of the heap are considered somehow less deserving of legal protections.
People signing legal aid applications in cells are stressed and in no position to assert their rights.
A government agency which has as its motto "Helping People Access Justice" should take steps to ensure such people's rights are protected.
It is time for the Government to make sure the intent of the law is fulfilled.
* Catriona MacLennan is a South Auckland barrister.
