Who pays the price of justice?

The cost of a day in court is set to skyrocket next month. JAN CORBETT asks who will be able to afford it.

A typical Thursday morning in the High Court at Auckland and lawyers carrying their black robes over their arms hurry to courtrooms where at least 10 civil cases are set down for some sort of hearing.

Mostly they are disputes between people and companies. But there is also a case involving the Royal Forest and Bird Protection Society and the Auckland Regional Council. Perennial litigants property developer Adrian Chisholm and the Auckland City Council are back for another stoush too.

It might look overly formal, even arcane. But this is the outward manifestation of a civilised society in action.

The prospect of a day or more in court if someone, for instance, sells you dodgy goods, moves their property boundary across yours or breaks a contract, gives some certainty to buying anything from a toaster to an office tower. The civil law, in other words, enables life and commerce to proceed in an orderly fashion.

But civilisation is about to get more expensive. Litigants filing High Court actions after July 1 will face an astronomical increase in court fees - from $120 to $900 for filing a claim, from $650 to $2200 to have it set down for a hearing, and from $470 to $1900 for every half day in court after the first. Similar fee increases apply to the Court of Appeal.

Although District Court fees remain a fraction of what litigants pay in the High Court, they have also been significantly increased. Only the Family Court remains a fee-free zone, except for divorce or adoption cases.

At the same time, fees for the Disputes Tribunal, where arguments about sums of less than $12,000 are heard, have been cut. And while the Citizens Advice Bureau and Consumers Institute are happy about that, they lament that the fees have not been entirely eradicated, arguing that even $30 can be out of reach for some families.

But, so far, the only audible protest against the massive court fee hikes has come from the New Zealand Law Society, which is writing to the minister begging him to reconsider.

Its president, Hamilton lawyer Christine Grice, says the society is concerned that access to justice shouldn't be only for wealthy litigants.

The spectre of lawyers protesting that rising costs might be a barrier to getting justice could not help but raise an ironic chuckle from the cynical.

As a discussion paper circulated by the Department for Courts last year points out, court fees are the least expensive part of taking a case to court. The biggest item on the ticket will be the lawyer's fees.

"Few people who enter a lawyer's office can be under the impression that they are dealing with a charitable institution," the discussion paper points out. It notes elsewhere that "solicitors' quotes for taking a defended case to court appear to start at $10,000 and range upwards.

"At the extreme it has been suggested [by former Law Society president Austin Forbes] that 'for any claim for $50,000 or less it would be rare that the cost of a defended hearing was justified."'

In other words the lawyers will take the lion's share of any amount less than that.

Lawyers' charges start at $150 an hour, average around $300 an hour and can be as high as $1000 an hour for what the profession likes to call "quality counsel." By comparison, the court fees seem insignificant, even at their new, inflated rates.

So, aren't lawyers' fees the real barrier to justice for average people?

Christine Grice argues otherwise. She says people have a choice of lawyer - meaning they can shop around for the $150-an-hour one if they don't want to pay any more. They cannot choose their court.

In practice, she says, lawyers are likely to take a case of clear injustice on a contingency basis - they work for nothing and pay the fees, expecting to be reimbursed after the client has won the claim. She thinks they may be less inclined to carry that risk if the filing fee for the High Court is $900, rather than $120.

And while civil claims above $200,000 in value must be heard in the High Court, that court also deals with civil cases that do not involve money and do not always involve people who have money.

One such example, says Grice, would be a judicial review of refugee and immigration status ruling for someone of little means who does not qualify for legal aid.

"A number of cases in the High Court involve ordinary people," she says. "Examples from my own practice are people who need to stop a mortgagee sale." After all, $200,000 is the average price of an Auckland house, and house deals can go wrong.

Under the new fees regime, court registrars can waive Court of Appeal or High Court fees if they consider the fees are indeed preventing someone who cannot afford them from getting justice. There is no such discretion for District Courts.

Grice wonders how the waiver system will work in practice. As it turns out, the Department for Courts is not entirely sure.

Margaret Thompson, manager of strategic policy, says registrars will be sent a memo before July 1, giving guidelines on when to exercise their discretion and when to refer the request to a judge. But those guidelines are still being worked on.

Thompson admits there is no mechanism for testing whether someone who claims to be impoverished actually is, or for ensuring the guidelines are uniformly applied across registrars, courts, towns or regions.

Not only that, the public will not know who has had their fees waived and who hasn't. "It sounds like private information to me," says Thompson.

However, the department will keep anonymised records of applications, obtainable under the Official Information Act.

Another factor in deciding whether to waive the fees will be whether the issues in the case carry an overall public benefit - establishing new case law, for example - or whether the benefits will be entirely personal to the litigants, such as when a will is being contested. It will be up to the court registrar to have a feel for the public and private benefits of the case.

The public benefit associated with the civil courts is the reason the Government is not advocating a complete swing to user pays.

Although the new court fees are an attempt to "make those at the top end pay a fairer share" as the Minister for Courts, Matt Robson, describes it, they still do not come close to the actual cost of running the civil courts, which for the 1999-2000 financial year came close to $100 million. About $14.8 million, or almost 15 per cent of that cost, is recovered through fees.

Under the old regime, fees recovered 7 per cent of costs in the Court of Appeal, 24 per cent in the High Court, 36 per cent in District Courts and 22 per cent in the Disputes Tribunal. The new fees will mean 26 per cent of costs are recovered from the Appeal Court, 54 per cent from the High Court - including 100 per cent of probate costs and 93 per cent for insolvency proceedings - and 48 per cent in District Courts.

Cost recovery in the Disputes Tribunal is expected to drop from 22 per cent to around 18 per cent.

The costs, in case you were wondering, cover everything from the salaries of judges and their support staff, to the use of the courtroom.

According to Department for Courts senior policy adviser Jonathan Petterson, the new fees were worked out by subtracting the probate and insolvency costs and averaging the remainder over litigation costs, with the fees being loaded more heavily on filing an application than on having it heard. The rationale is that hearings are expensive and weighting the costs in that direction may prevent someone from seeing a case through to its end.

Petterson doubts the increased filing fee will reduce the number of cases that are filed, to begin with. Although hard data is unavailable, the Department for Courts is confident only a minute percentage of civil cases filed in court progress to a full hearing.

As complex as it might be to understand how the court fees have been set, equally elusive for the lay person, is a clear, up-front idea of what their lawyer will cost them.

Lawyers do not have to provide fixed quotes as do, for example, builders, plumbers and electricians, the reason being that what might look like a simple case at first glance could turn out to be complex and time-consuming.

The receptionist at the Auckland District Law Society says she is constantly explaining this because she gets calls from people wanting a schedule of lawyer's fees "all the time." She advises people to get an estimate and to phone around asking for hourly rates.

Even then, she warns, be aware you'll be charged for everything, including faxes sent and phone calls made for the preparation of your case.

When he announced the new court fees, Matt Robson claimed that under the old fee structure taxpayers "were heavily subsidising litigants such as giant telecommunications corporations," which can use the civil courts to delay a competitor's entry to the market.

However, the Department for Courts does not know who the regular users of the civil courts are - but we do know who they are not.

South Auckland-based lawyer Catriona MacLennan says raising the court fees will make no difference to most of her clients who are on benefits or low incomes - they couldn't afford the old ones. She says raising the income levels for access to legal aid is the chief issue in access to justice for all.

A report from the Institute of Economic Research, which made the news earlier this year, showed that the eligibility level for legal aid had been so eroded by inflation that in some cases they sat below the baseline benefits for solo parents.