Cornall, Robert; Woods, Mark; Laird, Cathy; Innes, Prue --- "Legal aid after the cuts" [1997] LawIJV 4; (1997) 71(1) The Law Institute Journal 8

• Legal Aid After the Cuts
• Practitioners have hit back

Legal Aid After the Cuts

Robert Cornall

Last month, Robert Cornall

finished his first year as

managing director of Victoria Legal Aid. In this inter-view he talks to Prue Innes about the challenges facing legal aid as he copes with massive funding cuts condemned by one critic as "one of the most vicious attacks on the rights of ordinary Australians we have ever seen".

* * *

For most people, a multi-million dollar reduction in the budget available to run legal aid in Victoria would be a disaster.

The federal government's recent announcement that it would withdraw $100 million from legal aid over the next three years has provoked a bit-ter row between governments. High Court judge, Justice Michael Kirby, warned of serious consequences for the legal system as a result of these cuts. Criminal and family lawyers have been much blunter, warning of an impending crisis. Would you believe that twelve months into one of the toughest jobs in town, Robert Cornall can see some positive aspects?

It need not be all gloom and doom, he says. But a dramatic change in the legal culture, particularly in the way many practitioners have done legally aided cases in the past, will be needed.

Mr Cornall is determined that despite losing more than $10 million - or one-seventh - from its budget by the next financial year, Victoria Legal Aid will be producing a lean, mean and efficient service.

Too mean and lean? He acknowledges - and rejects - criticisms that he is producing a supermarket-type legal product. There has often been too much work done in the past, he says, although he is careful not to say that some practitioners have used legal aid as a benefit fund.

"Not a lot of organisations can absorb a 15 percent cut without a fair amount of difficulty and trauma.

"But I think that across the whole nation there will not be the available funding for the sorts of services, and level of service, that we have been used to for the last ten years.

"That is the reality of the future, and the sooner we accept that and plan for and adjust to it, the better," he says bluntly.

The imposition of fee ceilings on grants, already introduced and foreshadowed, to cope with the cuts has been condemned as "cost cutting at the expense of poor clients". But to criticisms that VLA has over-reacted, cutting too soon and too deep, Mr Cornall says that VLA had two choices: to act now or to face insolvency.

The first area to feel the brunt of the latest cuts is family law, and grants for criminal cases have also been affected - an inevitable consequence of the federal government slashing its legal aid contribution, and the end of the 55-45 funding agreement which split legal aid responsibility between the federal and Victorian governments.

A maximum of $35,000 will be approved for any one family: up to $15,000 if separate representation for a child is ordered by the court, and up to $10,000 for each parent.

Family lawyers were concerned when the new limits were imposed. The Chief Justice of the Family Court, Justice Alastair Nicholson, said it would be a tragedy if people were forced out of the courts be-cause they could not pay.

Mr Cornall is not unsympathetic. However, he is realistic.

"We are going to hit a financial wall, and we either hit it now and control it or it will become unmanageable," he said. The changes seem tough, and have attracted criticism. But he believes that the community will see them as unavoidable but fair.

"I can't think of too many other examples where governments will contribute $35,000 to one family's problems. It is a lot of money, and if it is used wisely I am sure we can achieve negotiated and, if required, judicial resolution of those disputes within these cost ceilings."

Family law is taking around 36 percent of VLA's legal payments budget. Family law payments have increased by about $6 million (to $19 million) over the past year, largely caused by a huge increase in orders for separate child representation since the decision in Re K in 1994.

"It has become a major cost for us, and we have expressed concern about the disproportionate number of orders being made in this state, which were, on our figures, more than New South Wales and Queensland combined in 1995-96."

Mr Cornall said that separate representation orders had in-creased from fewer than 70 a year four years ago to 1172 last financial year in Victoria. "I don't doubt that in many cases they make a very valuable contribution to the resolution of difficult cases; none of that is in dispute. The only issue is, can we put some financial controls on it?"

There is a philosophical argument that there should be no limit on what is provided for legal aid in this sort of situation. But Mr Cornall says it is not realistic, given current government cutbacks across the board. Nor does he believe that in an ideal world legal aid should be a bottomless pit.

He is also concerned that legal aid might be encouraging litigation in family disputes, when people paying their own costs would choose to compromise. He is anxious to try alternatives such as one approach in Queensland which aims at early resolution of parenting and residence issues, with legal aid not being granted if a reasonable offer has been rejected.

Given that funding is shrinking, Mr Cornall and the VLA Board have decided the only fair thing to do is to spread the available money across as many people as possible. This will be achieved by strictly enforced dollar ceilings, and encouragement to the legal profession to work smarter for its money. After all, if one applicant's grant blows out, that must be at the expense of another, equally de-serving person.

"We need to rethink our legal culture. What we are seeking to achieve is cost- and time-effective legal services at a reasonable figure." Mr Corn-all stresses that he does not expect practitioners to do more work for less money. He wants them to do less work for a reasonable fee. "I have no doubt that there are very competent lawyers who, given a particular budget and having a fair idea of what our requirements are, will be able to provide top quality legal services for legally assisted clients within these financial limits.

"Equally, I am confident that there are some lawyers who will not be capable of doing so, who would be better off not doing legal aid work in the future.

"Practitioners have got to move away from the concept of the hourly rate, where they think about a file and put down a six minute unit. We want to pay them a fixed fee for a particular task. We don't want them to come back and say, I had to do three more hours' work. "If they continue to mesmerise themselves with hourly rates, we will never be on the same wavelength."

Mr Cornall says that the efficient practitioner with a sensible attitude, who homes in on the essentials of the case, does a competent job and puts accounts in promptly, will be able to make a reasonable profit, based on a regular allocation of legal aid work.

"It is really a question of attitude to litigation.

"We are moving towards a fixed fee for a particular service. We are not interested in how many hours you take to do it, we just want you to deliver the service.

"I am sick and tired of family lawyers telling me they are losing money doing family law work for legal aid, when they are earning thousands and thousands of dollars.

"If they are in fact losing money, something has to be

done to address the system, not just to pay more for their services. They are providing services we can't afford to pay for, and perhaps that people don't need."

There have been concerns that not enough control has been exercised over litigation that is funded by legal aid. For years people have been advocating lump sum fees as a wonderful way to concentrate lawyers' minds. VLA intends to make greater use of lump sum fees in the future, when other controls are in place.

Other criticisms have been made about a "penny wise pound foolish" attitude about the quality of counsel who have sometimes been engaged, with some barristers prolonging cases (and their fees) which more efficient barristers would have finished much faster.

There are a few notable examples of practitioners who concern judges and magistrates. Asked if he believes there are practitioners who rort legal aid, Mr Cornall says there are certainly some who have provided an unsatisfactory level of service, and he has written to them asking why they should not be excluded from legal aid work.

Rather than rorting, he believes that there are practitioners who, with legal aid, do everything possible to assist their client - far more than they would do if the client were paying the bills. "But I think it is more a mindset than an intention to extract funds from legal aid."

He is keen to set up some-thing akin to a "preferred supplier" system among practitioners. The Legal Aid Act provides for limited panels of practitioners, but the section has never been proclaimed. VLA has asked the Attorney-General to introduce it, so it can deal with practitioners known for their efficient service, in the same way that the Transport Accident Commission, insurers and banks now do.

He also sees huge benefit from recently introduced conditional fee arrangements, which will, compared with legal aid where practitioners take a 20 percent cut and have additional administrative costs, allow practitioners a premium of effectively up to 65 to 75 percent over legal aid rates.

Conditional fee arrangements will allow lawyers to mark up their normal fees by 25 per cent, which is not only an incentive to lawyers, but will weed out cases which should not be run, if no lawyer is prepared to punt on them.

The Law Aid scheme, a contingency funding arrangement to be run by the Law Institute and the Bar, will also help spread the burden when it comes into operation. The Attorney-General has made available a $1.8 million seeding grant to get the scheme started.

So it's not all gloom and doom? "There is an element of gloom and doom, but it won't be realised if we are successful in achieving changes in the legal profession's approach to the way litigation is conducted. If lawyers think that litigation should continue on the same basis as in the eighties and the first half of the nineties, the gloom and doom scenario is realistic.

"But we are confident there will be practitioners who want to do legal aid work and can do it efficiently and effectively within VLA's dollar budgets or lump sum fees and still make a reasonable profit.

"You could even put a very positive spin on it and say that this gives us an opportunity to address the cultural change needed in the litigation area."

He says that judicial leadership from the Supreme and County Courts in how the courts expect litigation to be conducted is significant. For example, judicial case management now extends to all areas of both courts' work, needless paperwork in discovery and interrogatories is being abolished, and mediation is being emphasised by the courts.

"I think they are to be strongly supported and complimented for doing what I think courts need to do: that is to show the profession the court's expectation of how litigation should be dealt with. The profession will fall into line with what the courts require.

"All of a sudden you could have a wave of change that is quite complementary and I

think will have a very beneficial outcome for the whole community. If at the same time we get a lot of legal aid work done for fewer dollars, that is a plus."

Mr Cornall says that despite the upheavals in recent times, VLA's relationship with the profession is reasonably amicable. Barristers and solicitors would prefer things not to have changed, but they realise that the sorts of expenditure reductions which must occur will not be achieved without significant change.

"They recognise that we are facing a very difficult challenge. My impression is that while the profession is obviously concerned about these changes, it is in an environment where a lot of things are changing, and much as they might like them to remain unchanged, this isn't an option."

He is not very impressed with suggestions made by some people that it was better in the "good old days" when legal aid was a limited arrangement through the Public Solicitor's Office and the Legal Aid Committee, without the bureaucracy - and cost - of a modern legal aid organisation.

"I think that is just nostalgia running rampant - the kind of comparison between the nine-ties and the early seventies you get when lawyers chat over a few drinks.

"For a start we are dealing with a much wider range of services than was ever provided in the seventies - information, advice, duty lawyers and so forth. There are major in-creases in the level of services provided and expected now.

"I don't think there is much validity in comparisons with the seventies. There is much more validity in looking at effective, efficient government service bodies today and to-morrow, where we can make some useful comparisons and learn from their experience."

VLA is now heading in that direction. However, the past four years have been difficult for the organisation, which was virtually at a standstill after the incoming coalition government announced there would be a complete review - but took three years to do it.

"The legal aid organisation has obviously been affected by the uncertainty, and this has had a debilitating effect on morale.

"For three years the organisation was literally put on hold, important decisions were postponed, and it was difficult to fill staff positions when people left because no one knew what the terms of that engagement should be.

"But I have endeavoured to keep people informed at all times as to what we are doing, where we are going and why we want to go there. I think there are some signs that people are looking forward to the future much more positively than they were twelve months ago."

The new Board is now five people, two appointed by the Commonwealth, and three by the state. It replaces a much larger board, where members represented particular interest groups, and an organisation whose management structure was set up to operate largely by committees. The total effect was that there were almost insuperable management problems.

Following the review by the former senior partner of the then Sly & Weigall, Don Cooper, who recommended a number of changes, Mr Cornall accepted the challenge to head the new organisation. Tough decisions, including reducing staff by more than 10 percent and tightening eligibility requirements for grants, were unavoidable.

One of the VLA Board's early decisions effectively stopped 4000 people getting legal assistance in the Magistrates'

Courts, when annual summary crime grants were reduced from 23,000 to 19,000, provoking widespread criticism. Recently the Auditor-General described the Victorian body as less efficient than its interstate counterparts, although he recognised the potential benefits of changes introduced this year.

"Personally it has been a hard year. When you are in a very fluid environment, the really draining factor is to try and anticipate all of the con-sequences of an action. On the surface it seems sensible, but in a situation that is changing quickly, you also have to think through whether that decision is consistent with every other decision you might want to make over the next few months, and that is a mentally very hard exercise," says Mr Cornall.

"But it has been very interesting and I am very pleased to have been allowed the opportunity to be part of re-structuring legal aid delivery in Victoria."

Many thought he had jumped from the frying pan into the fire when he left the Law Institute, where he had been executive director, for Victoria Legal Aid. But the changes looming then for the profession had nothing to do with his decision.

"Nine years in that job was enough, and I was keen to move on to the next stage of my career. I wasn't motivated by the fact that there were changes at the Institute, except to the extent that it made it a good time to go."

PRUE INNES

Practitioners have hit back

Practitioners have hit back at comments made by Robert Cornall in the interview about his first year as VLA managing director.

Focusing primariliy on family law issues, they say his comments bear little relationship to reality in family law practice. Mark Woods, a criminal law and family law specialist, says that in his opinion relations between the legal profession and VLA have never been worse since the commencement of the present legal aid system

"All the profession sees is a Board that does nothing except cut services. THe Board goes through the usual bureaucratic nonsense of changing its logo, but it seems unable to attack the big issues," he says.

Chairman of the Institute's Family Law section and family law specialist, Peter Royston, says it is a real concern that disillusioned and angry litigants may take the law into their own hands if legal aid funds are not available in casese involving issues such as children's residence and contact.

He says Mr Cornall's statement that family lawyers are upset because there are changes in legal aid funding and that practitioners are unused to change is inaccurate as 'family lawyers have absorbed more change than probably any other area of law in the past five or six years?.

Jan Pannam, a family lawyer and Law Institute Executive member, describes it as "extremely dispiriting and disappointing that the views expressed by Rob Cornall do not appear to me to bear much relationship to the reality experienced by family lawyers".

Mr Woods, who is the Institute's immediate past president, dismisses Mr Cornall's statement that "it need not be all gloom and doom".

"It is all gloom and doom. We have a Board merely implementing government policy and providing apologia for razor-like cuts which are simply not legally or intellectually sustainable.

Both Mr Royston and Mr Woods criticize VLA for introducing funding caps before commiviv: alt I inrltls are cut.

"There has been nu 1. h(rcentcut or final deciiiI1 le, the Commonwealth in relation to its funding. The Board is cutting present grants to people whose funding is assured - or until June 1997 in any event," Mr Woods says.

However, Ms Pannam says that Mr Cornall cannot bear all of the responsibility for the savage reduction in legal aid in Victoria.

"As Peter Short stated in Australian Lawyer: `If the parties are unable to afford even the most basic legal ad-vice and legal representation, not only are their rights being effectively withdrawn, but they are inevitably driven to finding their own solutions outside the court's process'."

Ms Pannam says the federal government has clear obligations pursuant to the UN Convention on the Rights of Children.

"Although statements have been made to the effect that aid in these matters should not be reduced, it is the states which bear the final responsibility for the savage cuts in that area," she says.

Mr Woods describes the proposition that family law cases can be dealt with for $10,000 as "utter nonsense".

"With $10,000 for family law cases, he can't expect anything other than supermarket-type justice."

Mr Royston says family lawyers do not say legal aid should be a bottomless pit but there ought to be a discretion for providing more money to some cases and less to others.

He says it is very harsh to say that there has often been too much work done in the past, and asks: "How can one predetermine what is the right amount of work?"

Family law is not like other disuutes where the disoute is generally centred on one incident, argues Mr Royston.

"Family law difficulties are fluid. The first incident may be separation, then difficulties may arise over contact with the children. Then, one party may make allegations about the safety of the children. Then one party may refuse contact or disappear with the children.

"Each of those incidents is a new dispute and needs to be dealt with."

According to Mr Royston, family law clients demand and need on-going communication with their lawyers. "It is not just a commercial dispute."

He says the cost caps are not just allocated to lawyers to use as they see fit. "There are strict stage of matter limits, with extremely parsimonious dollar limits for each stage. There is also the need to obtain approval for funding to continue to the next stage.

"I am not aware of what the average legal aid bill is, but I suspect that very few get to the caps that have been introduced. The problem with the funding caps is that there is no discretion to increase the amount in appropriate cases. It is also important to point out that caps include barris- ters' fees and disbursements such as psychologists' fees."

Mr Woods says family law practitioners, in particular, are not mesmerised by hourly rates, as suggested by Mr Cornall.

"It's just rubbish and shows a lack of understanding of family law practice. The sug- gestion that family lawyers doing family law work for legal aid are earning thous- ands and thousands of dollars is outrageous and I challenge him to give examples. "If he thinks anyone is making a fortune out of legal aid family law, then I think he is out of touch."

Mr Royston says there is a scale of costs fixed by the Familu Law Act. he scale is not entirely time based, but legal aid im- poses time based costing. Why should there be a different method of costing for legally aided cases?

"Mr Cornall's claim that he is sick and tired of family lawyers telling him they are losing money doing family law work for legal aid, when they are earning thousands and thousands of dollars, would seem to me to indicate that he has never had the experience of running a legal aid family law file.
"To do no more than is necessary in a legally aided case and to cost it on scale, generally means that a lawyer, who has to accept a stage of matter limit, is accepting far less than the file is worth, costed on scale." Mr Woods does not oppose lump sum fees, saying work on that basis has been carried out for years in a number of mat- ters, including Magistrates' Court family law, Children's Court and County Court appeals.
"My concern is simply the quantum they have intro- duced because I believe it's miles too low." He is also concerned about the ethical position of lawyers involved in cases where fund- ing runs out. MS Pannam claims there are instances where the pro- vision of legal aid could lead to a continuation of litigation which would not be pursued if the matter had been privately funded.
"There is anecdotal evidence to support the proposition that on occasion, people have pursued litigation to an extent well beyond that of a reasonable privately funded litigant.
"However, in many in- stances in the past, experienced practitioners who were employed by the Commission were able to persuade those litigants to reconsider their attitude upon the possibility of aid being withdrawn where it could be established that one party was not being reasonable in response to proposals for a resolution by the other party.
"Unfortunately, it would appear that the current response of to those same is make savage right across the and impose unrealistic limits on lega1 aid at specific Stages the proceedings. The reference by Robornall to spreading the legal aid dollar by strictly enforcing dollar ceilings will not achieve the desired result,"

MS Pannam says. The three practitioners are also deeply concerned about the issue of separate repre- sentation. MS Pannam feels in her opinion some of the statements made by Mr Cornall showed a "regrettable lack of understanding" of what is involved in the conduct of a file where the solicitor has l been appointed as a child representative.

"Children are among the most disadvantaged sections , of the community, and a society which is prepared to reduce or qualify the representation of that section will clearly suffer the penalty as those children become adults."

MS Pannam says it has never been a philosophical argument of reputable family lawyers that there should be no limit on the provision of legal aid in child representative matters.

"Prior to the proliferation of child representation orders by the Family Court in Melbourne, appropriate decisions were able to be made about reductions, or justification provided for extensions of aid in a particular matter.
"It is difficult to understand why there has been such an increase in orders for the appointment of child representatives, notwithstanding the wide and far reaching criteria as expressed in Re K.
"It would appear to be sensible for the court to revisit those criteria, taking into account the many in-stances where such orders are not appropriate, even though the criteria may have been met."

Mr Royston says significant points to be made in relation to Re K are that Australia has obligations under the United Nations Convention on the Rights of Children concerning the representation of children, and although no statistics have been kept on whether the appointment of child representatives assists with the early resolution of disputes, anecdotal evidence suggests this is the case.

Mr Royston also points out that at the Full Court hearing of Re K, counsel representing the federal government was asked whether it appreciated the implications for legal aid funding of the position which the federal government was urging (that is, the appointment of a child representative).

Counsel assured the Full Court that the federal government was aware of the funding implications, Mr Royston says.

"To now savagely cut that funding must be political expediency and/or economic rationalism at its worst."

Mr Woods agrees, saying that if the federal government did not think separate representation was necessary, it could legislate accordingly - but had not.

"In my opinion VLA shouldn't act as a quasi-legislator to determine or qualify the common law by manipulating the purse strings."

Ms Pannam says the suggestion that the profession could work "smarter for their money" did not reflect what is involved when acting as a child representative in the Family Court.

Family law specialist, Lin-ton Drever of Harwood Andrews, adds: "Family law is an intensely personal area of the law that cannot be reduced to mechanical operations as suggested."

Mr Drever says that already a significant proportion of experienced family lawyers do not do legal aid work. "Now the remaining ones will be reluctant to do legal aid family law work. There has never been any money in a legal aid family law file and the further reduction in legal aid grants will considerably reduce the number of lawyers who are willing to accept legal aid clients."

In relation to case conferencing, Mr Royston describes the proposal as interesting but needing to be carefully considered.

Mr Royston says the Family Law Section executive had been told the Queensland experience was "less than satisfactory", with case conferencers feeling obliged to disqualify parties from legal aid to "keep their averages up".

"Further, it is very import-ant to have all the relevant information available before one can tell whether one party is being unreasonable. Often judges take many days to decide appropriate out-comes in children's cases, so it is very difficult to see how a case conferencer can make that decision in perhaps an hour at an early stage in proceedings before evidence is tested."

Mr Drever has experienced previous efforts of case conferencing by the former Legal Aid Commission which he describes as

"nothing more than trial by the threat of withdrawing funding instead of trial of the issues with the usual rules of natural justice and evidence."
"In one case, the matter was settled purely because aid was threatened to be with-drawn rather than a full consideration of the issues by examination and cross-examination. Neither party was satisfied that they had a right to state their case."

Mr Royston also says that if family lawyers handling leg-ally aided cases were forced to cut corners, then they would be exposed to greater risk of being sued by disgruntled clients who did not obtain the service they demanded.

Conditional fee arrangements referred to by Mr Corn-all were not yet in existence and would not apply to family law matters. "Similar comments can be made in relation to the Law Aid scheme," he says.

"Rob Cornall's comments about judicial case management being led by the Supreme Court and the County Court suggest to me that he is unaware of the workings of the Family Court, which introduced case management much earlier than the state courts."

Ms Pannam says it is unfortunate that Mr Cornall has a perception that family lawyers, in particular, may be "It is not the experience of the high quality family lawyers who have given unstintingly many hours of unpaid assistance in legally aided matters. These people will no longer accept referrals from VLA and the consequent delays and cost to the community will be incalculable.

"Rob Cornall knows as well as anyone that lawyers are expected to be high quality legal service providers. That is impossible within the constraints now being exercised by VLA." 