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Legal and Constitutional Affairs References Committee
17/05/2013
Impact of federal court fee increases since 2010 on access to justice in Australia

KELLY, Ms Alexandra, Senior Solicitor, Consumer Credit Legal Centre New South Wales

LARKINS, Ms Lucy, Senior Policy Adviser, Federation of Community Legal Centres Victoria

MATTHEWS, Ms Helen, Principal Lawyer, Women's Legal Service Victoria

PINNOCK, Ms Elizabeth, Managing Solicitor, Hunter Community Legal Centre

[11:13]

CHAIR: I now welcome representatives from the Federation of Community Legal Centres Victoria, Consumer Credit Legal Centre New South Wales. Hunter Community Legal Centre and Women's Legal Service Victoria. The Federation of Community Legal Centres Victoria has lodged submission No. 28, Consumer Credit Legal Centre New South Wales has lodged submission No. 18, Hunter Community Legal Centre has lodged submission No. 17 and Women's Legal Service Victoria has lodged submission No. 22 with the committee. Do any of you wish to make any amendments or alterations to your submissions?

Ms Matthews : I wanted to make two comments. One is that in our submission, from Women's Legal Service, we made reference to the subpoena fees for independent children's lawyers and I understand from an announcement from the Attorney General following the budget that those subpoena fees are not going to apply to independent children's lawyers. The other comment I wished to make is that on the third page we give an example of a sliding scale and I wish to emphasize that that was an example rather than a recommendation; clearly there has been no formula or method worked out in that example. It is simply an example rather than a suggestion. That was the only comment that I wish to make.

Ms Pinnock : I would like to thank the chair and senators for the opportunity to appear and give evidence today. I would like to address you first on an issue that has arisen since our submission was put in to this inquiry. I have read a number of the other submissions, and I endorse the submissions that other centres have made about the impact of the increases in fees on CLC clients generally. But this is an issue that has come to our attention since our submission was put in, and it relates to fee exemptions for clients of community legal centres.

It would appear that there is some ambiguity around the issue of whether clients of CLCs are in fact exempt from paying filing fees. The ambiguity arises largely out of the form that is currently used for applying for an exemption from court filing fees. Some papers have been provided to you which set out our submission on this issue in some detail, including a copy of the current form for applying for exemptions. You will see on that form that there are two references to clients who are in receipt of legal aid grants. At the top of the form it says: 'If you are receiving legal aid for your proceeding in the Federal Court or the Federal Circuit Court you should use this form'. In that sentence 'legal aid' is in lower case, and it is not clear whether the use of the term in that sentence is used in a broad sense of a free legal advice and assistance service or whether it is used in a narrow sense of a legal aid grant from the Legal Aid Commission.

Further on, at the bottom of that form, there is a tick box which applicants for exemptions can tick which says, 'I am in receipt of Legal Aid for these proceedings'—'Legal Aid' being capitalised in that part of the form. Again, it is not clear whether that is a reference to legal aid in the broad sense or in the narrow sense of a legal aid grant from the Legal Aid Commission. So there is some confusion on the form as to whether in fact CLC clients are entitled to an exemption because they fall into the category of being in receipt of a grant of free legal aid and assistance from a community legal centre.

CHAIR: Ms Pinnock, just to be very clear: I am looking for the form that has 'legal aid' in lower case. Which of the annexes is it that you are referring to?

Ms Pinnock : The form has been provided as a separate document on a separate page.

CHAIR: Okay, I am now looking at it—it is called, 'An application for exemption from paying court fees general'.

Ms Pinnock : Yes, that's right.

CHAIR: Thank you for that. And yes, I see that it does use lower case. This is a general application whereas the other annexures are—

Ms Pinnock : If I can explain: the other annexures to our submission are forms that were in use previously, up to November 2010, which did have a tick box allowing clients of community legal centres to apply for an exemption. So that form no longer exists, and neither does the tick box for the exemption for community legal centre clients.

CHAIR: I see.

Ms Pinnock : It is clear, in our submission, that the regulations intend that clients of community legal centres should be exempt from fees. The basis for that is that the regulations—again, this is set out in the submission I have provided—state that 'a person is exempt from paying a fee if they have been granted legal aid under a legal aid scheme or service approved by the Attorney-General'. I am not sure whether this is an exhaustive list—my colleague from the Federation of Victorian Community Legal Centres tells me it is not—but there are many community legal centres which are included in the list of legal aid approved schemes and services announced by the former Attorney-General. So it would appear from the reading of the regulations, and the reading of the list of approved schemes, that there is an intention that most if not all community legal centre clients should be exempt from the fees—and yet the exemption form itself does not include that as a possibility. Anecdotally, we have been told that many CLC clients have gone to court, applied for an exemption and not received it, when in fact they should have received an exemption.

CHAIR: Thank you for that. So that is an additional aspect to your previous submission.

Ms Pinnock : Yes.

CHAIR: The best way to proceed might be to park that issue for the moment and come back later with questions from the committee, who I imagine will want to address that in further detail. Do you have anything else to say in relation to your original submission?

Ms Pinnock : Nothing additional. I just want to emphasise the two submissions that we made in relation to the two areas where these increases in fees impact adversely on our clients. The first area is proceedings issued under section 46PO and 46PP of the Australian Human Rights Commission Act following complaints of discrimination which have gone through a process of conciliation in the Australian Human Rights Commission. In those matters, whilst the filing fee is only $55, there are additional fees applicable in the course of those Federal Court proceedings which are out of proportion to the filing fee and prohibitive for most of our clients, who are low- to middle-income earners. One example of that would be the fee for setting down for a hearing, which is $2,155. So when you look at the additional fees that would be incurred in the course of those Federal Court proceedings, they become prohibitive for our clients.

The second area was in relation to family law matters. There have been many submissions made in relation to the issue of the increase in the divorce fee. I endorse all of those submissions and would make the same submission myself. New fees for subpoenas is an issue which impacts adversely on CLC clients. In many complex family law matters there may be as many as five subpoenas which need to be issued. That puts the cost up to something like $250-plus, which, again, is a prohibitive cost for low- to middle-income people.

The third issue is in relation to newly introduced multiple filing fees. Whereas previously you could issue one application, which included an application for an interim order and a final order, and pay one fee, now you have to pay two fees—one for the final order and one for the interim order application. That, again, pushes the fees up to a level which is prohibitive for our clients.

CHAIR: Thank you. Do other people want to make short opening statements?

Ms Larkins : I represent the Federation of Community Legal Centres, which is the peak body for 51 community legal centres across Victoria. CLCs, as you know, generally provide help to people who are experiencing disadvantage, and our views are informed by the case work of our member centres. I am going to focus my evidence on family law court fees. Family law matters constitute a large component of the work that Victorian CLCs are involved in. Over one-third of the information and advice services offered by Victorian community legal centres last year related to family law.

We welcome the 2013 changes that reintroduced fee waivers and exemptions for disadvantaged litigants and believe this is a positive step forward to providing a fairer justice system. Removing this barrier for disadvantaged litigants is a common sense move that will promote access to justice and even the playing field. However, we are concerned about the failure to extend the fee waiver to divorce applications. Although people of limited means receive a reduction in fees, they still face a minimum $265 to get a divorce. That $265 represents almost the entire weekly Newstart allowance and over 80 per cent of the weekly single parent payment. When a relationship finishes, divorce is clearly an important part of moving on with life.

Our concern about the impact of the divorce fee is not merely hypothetical. As we noted in our submission, within four months of the reduced fee for filing a divorce being introduced, Central Highlands Community Legal Centre had five clients who abandoned their divorce applications because they could not afford the fee. The government has justified the lack of a fee waiver for divorce on the basis that the 12-month separation period required will give people the opportunity to save the necessary funds. However, the reality is that the 12-month period of separation is one of the most disruptive periods in a person's life. A mother may have needed to flee her home with her children and live in a women's refuge or she may be in the pressure cooker of being separated under the one roof with a husband who asserts financial control over her. This period of chaos is not conducive to saving money for a divorce. Therefore, the government's rationalisation for withholding full exemption for fees in cases such as these lacks logic.

The policy has significant repercussions in the real world. I will give you two examples. The first is in relation to a mother of four who was a victim of domestic violence. After mustering the courage to leave the relationship, she was on Centrelink benefits and was unable to access the $265 for a divorce. She was advised by the court registry that in her case the payment could be deferred for a month. She was unable to pay within the time period and, discouraged, did not proceed with the divorce. Her husband took this as an invitation to continue to attempt to control her, causing her significant emotional distress.

Another example is a CLC client who was a refugee whose husband was missing in the home country, presumed dead. She formed a new relationship in Australia and became pregnant. She was under significant cultural pressure to marry the father before the child was born. She could not pay the $265 fee, and, as a result, suffered emotional distress about giving birth out of wedlock. As these examples make clear, the increased fees are contributing to a system where the courts are only accessible to those with financial resources. We recommend that the filing fee for divorce be subject to the same fee exemption as all other filing fees.

Moving away from divorce, I will now discuss family law fees more generally. As we know, in the normal course of events people using the courts have to pay filing fees. There are exemptions for those who have an exceptionally low income, for example people who get legal aid or people who meet the financial hardship test. There is a third group of people who fall through the cracks, namely those of limited means who do not qualify for the financial hardship exemption. This group could be described as the working poor.

We believe that people on a low income who do not meet the criteria for financial hardship will be unfairly disadvantaged by the current pricing structure because they cannot afford to pay the full fees. Full fees can be prohibitive. For example, a person has to pay $500 to file an application for children and $800 for a divorce. People of limited means who do not qualify for a fee waiver are being unfairly discouraged from accessing the family law system. We believe that the bar for financial hardship is set too high.

One of the rationalisations for court fees is price signalling—in other words, using the court fees to send a message to encourage people to use alternative dispute resolution. This has the advantage of reducing the burden on the court system by encouraging people to seek mediation. In family law there are certain circumstances where price signalling is completely inappropriate. Firstly, with divorce there is no option but to use the courts. You either go to court and get a divorce or you stay married. There is no alternative, so price signalling is irrelevant. There are also problems with price signalling when it comes to children's issues. Superficially it might appear that parents in dispute over residency of children can resolve their issues through mediation, but mediated settlements without court orders are unenforceable. There are many situations when enforceable orders are required in respect of child contact and residence, and it is inappropriate to try to dissuade parents from seeking enforceable orders by using fees as a disincentive.

In conclusion, we think the unfortunate impact of the increases to filing fees in 2010 and 2013 is that an increasing number of Australians are being priced out of the family law system. To address the issues I have raised, I encourage the committee to recommend introducing a waiver for divorce fees, where appropriate, and to undertake a reassessment of the financial hardship test.

Ms Matthews : Thank you for the opportunity to speak today. I am the principal lawyer at the Women's Legal Service Victoria, which is a state-wide service that specialises in providing legal assistance to women experiencing family violence and involved in relationship breakdown. There is no charge made to our clients for any services that are undertaken, but we do require them to pay their out-of-pocket expenses. For the case work that we undertake, we usually manage to get the fee exemption, which is fortunate. However, we have many clients who are unable to pay simple disbursements like service fees. We will be asking someone to come up with the figure of $88 so that we can engage a process server to serve documents in proceedings in which they may be the applicant. Frequently, we have those sorts of applications sitting around for quite some time waiting for the person to get the $88 together.

That brings me to the question of the divorce fee, which is going to be prohibitive for a great number of our clients, so I can only endorse what Lucy has said. Most of our clients are on Centrelink benefits or are low-income earners. In the last 12 months we have assisted over 2,100 people, and over 70 per cent of those are on low or no income. Low income is identified as under $25,000 per annum. They certainly do not have the capacity to get together the figure of $265 in addition to the other costs that they may be asked to pay for in a divorce. That can be, as our submission indicated, the cost of obtaining a translated marriage certificate, which would be required to be filed with the divorce application. It would also involve the payment of a service fee.

One of the reasons why we use process servers is that while the act provides for people to serve by post, that requires the cooperation of the person receiving that document—they have to send back an acknowledgement of service. We do not often have that level of cooperation between the separated parties. The importance of the divorce for a number of our clients is indicated in our submission. Where there are cultural implications such as Lucy has mentioned, it is important for them to be divorced to allow them to remarry or to prevent the accusations of adultery being made in certain cultural groups.

In addition, we see a number of women who have not only been victims of physical family violence but also been the victims of economic abuse. Often, while their partner might say that they will agree to the divorce application—not that they have any way generally of preventing a proceeding—they will say, 'I won't pay for it; you have to do that.' So it is one final moment of economic abuse—probably not the final one, but it is another example of economic abuse that to be inflicted on the person who might have been experiencing that throughout the marriage and certainly throughout the period of negotiating property, child support and child arrangements.

In our view there are a number of reasons why it is important for people to have a divorce, and one of those of course is that there are legal consequences to being divorced. It impacts on the succession laws that apply to the parties and also impacts on presumption of parentage. Additionally, there is the issue of remarriage. We certainly believe that divorce should be available to people with financial disadvantage and urge the committee to recommend that the filing fee for divorce be exempted on the same basis that the other filing fees are.

The other point that we wish to make is in relation to, as Lucy described, the working poor or people on lower incomes. Paying fees in those cases has a significant impact. We see a number of people that we are unable to assist, and they are not eligible for exemption from the filing fees. It is a real disadvantage for them to have to proceed to court, paying what might be significant filing fees to commence the matter. This can impact on their capacity to deal with complicated parenting disputes.

Additionally, it is very common for a low-income earner to have superannuation as the only asset between the two parties. It is most unfortunate that if that person had attended a private solicitor they would have been advised that it is not really worthwhile proceeding with the matter if the superannuation is only of a modest amount. However, access to that superannuation is something that might be available to a person on hardship grounds, so it might be important to be able to split the superannuation, which the Family Law Act provides for. The only way you can do that is by order of the court. With an uncooperative other party, that means issuing proceedings. It might mean going to a conciliation conference. If the people are proceeding without any legal representation, which is quite likely, it is going to be with the assistance of the court that maybe some sense will be talked into them.

It is unfortunate that there are fees being attracted at each stage of that—the conciliation conference and the filing fee to initiate—and there would be additional costs involved as well, such as obtaining information from the superannuation fund; there is usually a cost of about $100 in doing that. So there are a number of costs there which I think really disadvantage those people who are on a low income and can effectively preclude them from obtaining a very modest property settlement, which is available to people on a more substantial income. A graded filing fee for low- to medium-income earners may assist them in having better access to justice, so we would ask that that be considered as well.

CHAIR: Ms Kelly, do you have something to say?

Ms Kelly : Yes, I will just add a few things. My centre, the Consumer Credit Legal Centre, is slightly different in the sense that we are not family law specialists. We in fact provide advice to New South Wales consumers in respect of courses of action and rights and remedies that they may have under the National Consumer Credit Protection Act, the Australian Consumer Law and the Bankruptcy Act—so, slightly different sections than family law. Historically consumer credit protection was state legislation, but it was transferred to the federal regime in 2010. In acknowledgement of that transfer and the loss of access to the state tribunals, consumers were given access to external dispute resolution through the Financial Ombudsman Service and the Credit Ombudsman and, in addition, a low-cost jurisdiction for small claims in the Federal Circuit Court and Federal Court. My submission largely relates to that group of people who might be wanting to seek access in the small claims division or in the Federal Court under the National Consumer Credit Protection Act.

The ombudsman schemes that have been set up have said to us that they really do not see their position as looking at matters of unconscionability or unjustness; they really see that as a matter for the courts. So our clients are faced with seeking remedies in court for matters that are predominantly in that sphere. So, when looking at access to court and having to pay a fee in order to get that redress, some consumers are not proceeding. When they go to the ombudsman and do not succeed they are not taking the next step of proceeding to court to assert a legal right that they may be entitled to because of the barrier of the court filing fees.

The Consumer Credit Legal Centre advises about 18,000 people per year. We cannot represent everyone, nor can Legal Aid. Many of these people will be looking at having to represent themselves in matters, with perhaps some minor assistance from us. The Small Claims Division of the National Consumer Credit Protection Act is in fact designed for you to not have legal representation as a right; in fact, it is something that you need to seek leave to obtain. The fees you are looking at in applying to the Federal Circuit Court are $180 if your claim is under $10,000, or $515 if your claim exceeds that amount. That amount is almost three times as much as the New South Wales Consumer Trader and Tenancy Tribunal, whose fees ranged from $87 to $180. In addition, if your claim exceeds $40,000 and you are looking at having to proceed to the Federal Circuit Court for remedies under the National Consumer Credit Act, you are looking at between $515 and $1,000 in order to commence proceedings.

Our clients have difficulty in filling in statements of financial position. We run the Supreme Court duty scheme in New South Wales, where we do face-to-face advice for consumers applying for stays on evictions from their properties in New South Wales. We do not represent everyone, because there is such a large volume of them, but we help them in filling out the relevant forms. One of those forms is the fee waiver form that the New South Wales Court provides. It is about one-third or even one-quarter of the length of the federal equivalent.

The difficulty consumers have in filling out the form correctly and establishing their true financial position is quite frightening. Often the client will find that a barrier, and they will put it on a credit card when they cannot actually afford it, or they will enter into some other way of trying to pay that fee because that form has created too much distress for them to even complete. We would also consider that if you have fees that are just too high, more people, even the middle class, would be looking to waive that fee or seek to defer it. By contrast, if it was a more reasonable fee, they are more likely to pay the fee. So, in one sense, having this financial hardship exemption is actually counterproductive because more people would be applying to have themselves exempted from the fee or to have it deferred or remitted at a later time. But if it was at a lower amount, there is a greater likelihood that a person would just pay it up front, particularly for our clients, which at some level are quite different from my colleagues' clients, who are more in the middle class—they may have mortgages and they may have access to some funds but just not to the extent of the funds that the fee requires. That is the basis of my submissions.

CHAIR: Thank you, Ms Kelly. There is a lot there to unpack from all of you. I think we should first of all go to the issue you raised, Ms Pinnock; we can all ask questions about that just to clarify the point that you are making. I want to check that I understand what you are telling us. Are you saying that, up until the form was changed, it was a fairly standard procedure for a client of a community legal centre to be able to make an application for a fee exemption?

Ms Pinnock : Yes. It is slightly more complicated than that in that, up until November 2010, there existed a form which allowed for a client to obtain an exemption if they had a notice of exemption from a CLC. From November 2010 that exemption was abolished for everybody, but some legal aid clients were entitled to apply for a reduction in the fee. So there was an intervening period when there was a bit more ambiguity. And then, in January this year, the exemption was reinstated. But it does not appear to have been reinstated properly for CLC clients, and there is ambiguity in the form about the references to legal aid and people in receipt of legal aid grants—whatever that may mean. It is clear from the regulations and the list of approved schemes that there is an intention that there should be an exemption for at least some CLC clients where they have obtained an exemption from the CLC.

CHAIR: What does it mean to obtain a notice of exemption from a CLC? Is that fairly standard?

Ms Pinnock : In the papers you have been provided with, there is an example of a notice of exemption. Our practice at our centre up until November 2010 was that, if we thought someone was entitled to an exemption from the fee, we would help them complete the form. We would tick the box saying they had assistance from a CLC and we would provide them with a notice of exemption. That would then be attached to the form and we would be pretty much guaranteed that they would then get the exemption.

CHAIR: So it still had to be processed by the court but it was a fairly straightforward process?

Ms Pinnock : That is right. But there was no ambiguity about whether they were entitled to it. What is happening now is that, because of the ambiguity in the form, clients, practitioners, court users and court staff are not aware of the fact that CLC clients should be exempted in some circumstances. So there are many circumstances where they are not being exempted when they should be.

CHAIR: Is this a simple matter of the form being redesigned? I am just wondering about a recommendation if we are of the view that that is appropriate.

Ms Pinnock : Yes. Our recommendation at the end of the submission that you have been provided with is that the form be redesigned so that there is now a tick box allowing for CLCs to provide clients with a notice of exemption. But we also recommend that the regulation be reworded slightly because it is slightly ambiguous. It refers to a grant of legal aid in lowercase, and there is case law to suggest that that should be interpreted in a broad sense to mean 'in receipt of a free legal assistance service'. So we are suggesting that the regulation also should be amended to reflect the fact that it is not referring to a grant of 'Legal Aid' from the Legal Aid Commission.

CHAIR: I will now ask if my colleagues have any further questions about this particular issue and then we can move to more general questions.

Senator CROSSIN: I think the additional papers you have given us go through that. Your recommendation goes to the fact that, as well as receiving legal aid, there should be a number of other dot points included so that people have an option underneath that.

Ms Pinnock : And that does not necessarily mean that all clients will be entitled to an exemption; it is where the CLC determines that they should have an exemption, having screened them from the point of view of means, income and that kind of thing. So my submissions in relation to court fees generally for the people that would not be entitled to an exemption still apply, but we still think that this is an issue which is creating significant problems now for people. As I said, anecdotally we have heard of many stories where people who should have been entitled to an exemption have not got one because of the ambiguity in the form.

Senator CROSSIN: Related to that, we have had some evidence this morning and in other submissions to us that, if you are fronting up to the courts and being represented through pro bono arrangements, you should not have to go through this business of completing the exemption from paying court fees; that once the court knows you are being represented in a pro bono sense, the fees should be automatically waived.

Ms Pinnock : In a sense what was happening prior to November 2010 was exactly that—in other words, it was just a way of notify the court that this person was assisted by us. We would do a letter and attach the letter to the form so the court knew automatically that that client was being assisted.

Senator CROSSIN: Even if you are being represented pro bono, you still have to go through this, do you? You still have to fill this out?

Ms Pinnock : That is correct.

Senator CROSSIN: Sorry, for the Hansard record: you still have to fill out the application for exemption?

Ms Pinnock : That is right.

Senator CROSSIN: Are there any instances where you have pro bono clients and they do not get the exemption? In other words, do they all get the exemption when they apply?

Ms Pinnock : Yes, our clients would.

CHAIR: We had better just clarify the term 'pro bono'. Essentially, to some extent your clients are getting pro bono legal work in that they are not paying for it.

Ms Pinnock : That is right.

CHAIR: But I think the term 'pro bono' that was used in the other submission is about those schemes that actually engage the private profession in a separate capacity to community legal centres for private representation. That is where there is a distinction, it seems, at the moment.

Ms Pinnock : That is exactly right.

Senator CROSSIN: What I am getting at, though, is that, no matter how the pro bono is operating, if the courts are actually exempting all of those fees then you have to ask yourself: why do people still need to fill in the form? Why couldn't you go back to the old system of the letter writing or the automatic exemption?

Ms Pinnock : There was a form previously; it was just that the form required you to send a notice of exemption with it.

Senator CROSSIN: I see. Whereas now it doesn't?

Ms Pinnock : Now there is no tick box for CLCs, so there is no opportunity to send a notice of exemption. The previous system worked well—in other words, the previous form was not complicated, it just required you to tick a box. The notice of exemption was not complicated either, and there is an example of that in the papers I have submitted. So for us it was simply a procedural formality, a way of notify the court.

CHAIR: Can I clarify: the current form, as well as the notice of exemption, is a more complex form that requires more completion than the previous form up to November?

Ms Pinnock : I do not think it is necessarily more complicated—it just has not got a tick box for CLCs and there is no reference to a notice of exemption anywhere.

CHAIR: So it is more of a Tattslotto: when the court looks at it they will assess it on the basis of what is on that form, rather than being persuaded or guided by the fact that the person is receiving assistance through a CLC?

Ms Pinnock : Exactly.

CHAIR: So, just coming back to the submission in relation to pro bono assistance, if there was going to be consistency it would probably be the same system except that the letter of exemption would come from the private law firm saying, 'We are providing pro bono assistance'?

Ms Pinnock : That is right.

CHAIR: And there would still be a form to fill in as well.

Ms Pinnock : Yes.

CHAIR: We might move to more general questions now. Did you want to comment, Ms Larkins?

Ms Larkins : I do have two comments on the list of exempt CLCs, which is the legal aid schemes and services approval instrument. Firstly, not all agencies who should be on the list are on the list. I think that is more of an operational issue rather than a policy issue. Secondly, even if a CLC is on that list, you are still not exempt from paying the divorce fee.

CHAIR: In relation to the distinction between an operational issue as opposed to a policy issue, is there a recommendation you would be asking the committee to make about including more agencies that should be on there but are not?

Ms Larkins : Yes. We would recommend that the legal aid schemes and services approval instrument is reviewed, because not all CLCs that should be on the list are currently on that list.

CHAIR: Could you on notice identify those community legal centres or legal assistance providers that are not included but you think should be?

Ms Larkins : We would be very happy to notify you of Victorian CLCs that are not on that list and should be on it.

CHAIR: The other point you made, and I wanted to be really clear about, is that although the ability to seek waivers and exemptions has been reinstated, no-one can get out of paying the $265 minimum application for a divorce.

Ms Larkins : Yes, that is my understanding. If you are receiving legal aid, or if you meet the financial hardship test or if you are an exempt CLC you are still required—

CHAIR: If you are living on the streets you still have to?

Ms Larkins : That is right. You are still required to pay the fee for a divorce.

CHAIR: Thank you. That is clear for me now.

Senator HUMPHRIES: I wanted to say first of all that in my opinion the case you have put to the committee is the unarguable one that the increases in fees impact on people in a very adverse way that disadvantages people on low incomes. We have a situation where people are deferring important decisions in their lives about divorce and other services they can obtain from courts, because the fees are simply too high to enable them to take decisions to access the courts in that way. Personally, I think it is a symbol of the chaos the federal government is in that it needs to come back to making these sorts of cuts to deal with its budget situation. The issue in my mind, though, concerns the many decisions that governments can make about how to deal with a situation where the government needs to rationalise the amount it spends. Let's work on the assumption that it wants to deal with the amount of spending it incurs, where it should be reducing that spending as a solution to that problem. The issue concerns how highly we rate access to justice in the various schemes of things on which governments could be spending their money. We have a situation with respect to divorce, for example, where most people who find themselves separated would have access to a similar range of entitlements at law with respect to access to social security payments and other services, to benefits relating to access to their children and to other things like that, which are not particularly dependent on the status of their marriage. What can you tell the committee that would persuade us—I am thinking here particularly with respect to divorce—that there is a strong social case for us to ensure that people do have access to divorce as a right that is very important to protect, given the many other rights that are in contest, if you like, in the present political climate, where so many things are being cut in order to make the federal government's budget fit its pocket?

Ms Matthews : In the submissions made by the Women's Legal Service and the Federation of Community Legal Centres we give examples of people where divorce is very important to them. That is either because there is a cultural significance in their not being able to remarry or in their remaining legally married to the person from whom they are separated, and also where there has been significant family violence, where there is a psychological need to move on but that is not possible without there being a formal termination of the marriage. So I think there are significant needs for people who are already suffering because of the dysfunction in their marriage, and it is most unfortunate that those people do not have access to that possibility of legally terminating the marriage.

But, as I said before, there are other legal consequence to being married. If you are able to divorce then your will, if you have one—if you have property—does not operate as if you were married to that person. The succession laws for people who do not have a will will operate differently if you have a divorce. Otherwise, if you are not divorced there is a presumption that you are still married and all the things that flow from that continue. If you have a child, the child is presumed—subject to you being able to rebut that—to be the child of the person to whom you are married. There will be circumstances in which that is only going to complicate people's lives into the future. There is such a lot of discussion about the importance of who can and cannot get married, and it is really unfortunate that we then suddenly think it is insignificant for somebody who has had an unsuccessful relationship, who may have been the victim of family violence or economic abuse from a person, to have to remain legally married to that person.

Senator HUMPHRIES: I suppose we would hate to think people were actually not getting married because they were afraid of the consequences of the failure of a marriage and the difficulties and the cost of not being able to get out of it afterwards.

Ms Larkins : Perhaps I could add that if the decision not to waive fees for a divorce comes from a belief that formalising a divorce is optional, we would be concerned about that. The reality is that in some circumstances divorce is essential, particularly when one of the parties wants to remarry. It is also of significant importance for people who have experienced violence, abuse or other harm in their marriage. So we would dispute the notion that divorce is an optional administrative procedure.

CHAIR: And I guess there is no alternative, is there? You are either divorced or you are not divorced.

Ms Larkins : That is exactly right.

CHAIR: There is nowhere else you can go if you cannot go to court.

Ms Larkins : That is exactly right. You have no option but to go to the courts if you want to get a divorce.

Ms Matthews : I think in the area of family law, if you are working through a process whereby you have been able to engage private lawyers to act for you then it is quite likely that all the legal fees you are paying are going to address parenting issues and property division issues. It is quite likely that your lawyer has said: 'You can do the divorce yourself.' You will still be entitled to the property areas or the parenting orders, which might be different in jurisdictions elsewhere. For that reason, it is not uppermost on the agenda for a number of people going through the process, but that does not mean that for people who do need the divorce there should be a financial impediment to them being able to proceed. Particularly with the clients we see—who are not paying any fees for anything that is going ahead in their matters, because they do not have the money to pay those fees—having the thing that is significant to them, their divorce, become unavailable because of a $265 fee is really unfortunate.

Senator HUMPHRIES: One of your submission or one of the other submissions talks about the proportion of people in divorce proceedings who are unrepresented. Did any of you make a comment about that? I cannot recall now where I read that. Do you know what the figures are?

Ms Matthews : I do not have access to those figures. Frequently people will conduct their own divorce proceedings. Commonly the people we are assisting are people who are unable to do that because of language barriers or because the party from whom they wish to be divorced is missing. There are a number of different legal steps that need to be taken before the divorce is granted, and that is a complication that is beyond what most people are comfortable dealing with. Certainly if you attend the divorce hearings there are likely to be more people in the court who are doing their own matter than there are people who are represented by lawyers, but there are an awful lot of divorces that are going through all the time.

CHAIR: Senator Humphries made the point that it would be concerning if we thought people were not even getting married because they were concerned that if it did not work out they would not be able to get divorced. I suppose the other aspect of that is that there will be people who will not be proceeding to get married to their new partner because of bigamy—you cannot get married for a second time if you are still married to someone else. That is also going to be a fundamental barrier to people being able to formalise new relationships.

Ms Larkins : Yes.

CHAIR: And that is above and beyond cultural reasons people might have for wanting or needing to do that.

Ms Larkins : That is precisely the situation of the woman I mentioned in my submission. She is a refugee in Australia and is unable to locate her husband and unable to pay for a divorce.

CHAIR: In that case there were additional compelling cultural reasons if someone was expecting a child. But even leaving that aside, just more broadly with people who choose to be married when they are formalising their relationship—we know how important that is at the moment with the debate about people of same-sex relationships—but who cannot get married because they are currently married to someone else. It is something that I had not really thought of before.

Senator CROSSIN: I want to ask how the fees are structured. In the submission from the Federation of Community Legal Centres, Ms Larkins, you say that the Law Council has recommended that a clear policy with respect to future changes to Federal Court filing fees should be developed by the AG's department in consultation with the courts, the legal profession and other stakeholders. So we have the issue where at the moment I guess there is no clear policy or even a roadmap about how this should be developed. Secondly, I asked the Law Council today, and they agreed, they are not involved and stakeholders are not involved. Taking from what I am hearing today, that even before we talk about who should be exempt and who should not be exempt and the level of the fees, the very basic foundation of how the whole thing is structured needs an overhaul. I would like your comments, Ms Larkins, and then others about that.

Ms Larkins : We do not object to court fees per se, provided they are calibrated according to somebody's capacity to pay. We welcome this committee's inquiry. We would welcome a review of court fees and believe that that process should be as inclusive as possible, including the courts, the Law Council, community legal centres and other legal service providers.

Senator CROSSIN: I suppose what I am getting at is, yes, everyone believes there should be court fees and we are not objecting to that. Someone, somewhere has to be responsible for overseeing them. But what I see is that the very basic cornerstone upon which this whole structure is built has not been done in consultation with stakeholders. Nor is there any sort of policy, roadmap or parameters upon which even the AGs or the courts operate in. I am hearing that we need to go right back to basics. I would like your comments about that.

Ms Matthews : I agree. The opportunity to consult on these things would have been terrific. I have been in court on a number of occasions when an enormous amount of court time has been wasted with submissions from independent children's lawyers about the subpoena fees that they have to pay. I am appalled at the waste of the court's resources in dealing with that. It seems to me that that fabulous waste of resources has resulted in somebody having a rethink about that. With any degree of consultation that subpoena fee would not have been imposed beforehand. Certainly, we would have loved the opportunity to have some input in the decision to impose those fees.

Ms Kelly : I agree. Stakeholders need to be consulted because there are unintended consequences that are sometimes not thought through. These stakeholders have a unique perspective. For example, in bankruptcy proceedings the application is made by the creditor bankrupting the bankrupt, but if that person is able to pay the debt and stop the proceedings they then have to pay that filing fee, which is quite high. Further, some of our clients cannot pay that and end up bankrupt, not because they could not pay the original fee but because of the left-over filing fee of the court. Those sorts of unintended consequences need to be thought through. The only way departments can do that is if they consult, and consult widely.

Ms Pinnock : I endorse what everyone else has said about looking at the system as a whole and taking on board what stakeholders say. I reiterate the point that I made about proceedings in the Federal Court following on from complaints in the Australian Human Rights Commission where it seems the fees for initiating the application seem to be out of all proportion to the fees that then follow on from that. Again, that can have unintended consequences because an applicant might think that all they have to do is pay the $55 filing fee and yet, when they come to sit down for a hearing, they are up for over $2,000, which they probably would not have been aware of or have anticipated right at the start. So there needs to be some proportionality between the various fees. There does not seem to be that at the moment.

Senator CROSSIN: Thanks.

CHAIR: I might just clarify something. I do not know if I am right on this or not, because I am really operating on quite outdated knowledge now; I have not been a practitioner for a long time. But at one point it was a requirement that, for a person to be entitled to apply for parenting payment, they had to initiate proceedings to try and have some kind of payment from the other parent of the child before they could do that. Is that still the case?

Ms Matthews : There are exemptions if there has been family violence. The process is that Centrelink will require you to be in receipt of child support or have sought an assessment from the Child Support Agency before they will allow you to have the full family tax benefit, but they will make an exemption in a case where there has been family violence and the person feels threatened by the consequences of having a Child Support Agency assessment.

CHAIR: All right. I think that that does not necessarily involve court proceedings, so that is not relevant.

Ms Matthews : No.

CHAIR: I just wanted to clarify that. I was going to ask you something, Ms Kelly. One of the opportunities that we have here is to hear from people who work at the coalface with some of the most disadvantaged people in Australia to understand what the real practical issues of unresolved legal problems are. There was a survey last year, the LAW Survey, which indicated that the cost of unresolved legal problems is far broader than just economic. It ends up being economic, I suppose, but it is in relation to health, mental health, productivity and sometimes homelessness where someone is evicted and perhaps could potentially have avoided that if they had had advice or been able to do something about it. So I am really interested in knowing the actual consequences that are being experienced by people, because we hear consistently in the submissions that have been put to us that a legal right that cannot be asserted or upheld is really no right at all; it is rhetorical but it is not there substantially. So, Ms Kelly, I am interested in the effects on your clients if someone has been to the Ombudsman and has been told, 'No, this is something that you need to take to court,' and then they cannot proceed with that. I think you said that that is in relation to unjust financial proceedings of some kind.

Ms Kelly : We see people who obtain mortgages, car loans or just credit cards. The argument that they would have is that the credit provider did not assess their capacity to pay at the time that they obtained the credit. It could be people who have had multiple credit card limit increases over a long period of time as well. So they reach a point in their life where they can no longer pay. They are no longer feeding their family or paying essential expenses or they are no longer paying the mortgage, because they are no longer able to keep up with the amount of debt. Often there are long periods of delay, so interest compounds and becomes quite large, so it becomes an even greater problem. Then they are looking at alternatives like bankruptcy or selling assets in order to pay the debt. In a lot of cases we have seen, they have had quite a good argument. We ran a case with the Ombudsman and we lost, and then we took it on at the tribunal and we were successful. But the time that it took for us to go through all of those procedures had led to incredible amounts of interest being run up over the period, so the victory in the end almost became Pyrrhic, because with what we were left with the client was not able to afford it, so they are looking at potentially having to go bankrupt. So there are those sorts of implications of difficulty in obtaining credit, in renting or in accessing services because of the stigma attached to bankruptcy.

CHAIR: Have you had cases where one of the parties might be a finance company, for instance—I imagine it is quite common—and a person has ended up having to desist from taking any further action even though there was an issue about deceptive conduct or misleading—

Ms Kelly : Yes.

CHAIR: What are the effects on the person of having to give up, essentially?

Ms Kelly : That is right. The case that we have had is that a mortgage has been entered. There were representations made at the time that the house was affordable—'Yes, buying a house is better than renting'—to a family for whom it really was not; home ownership is far more expensive for them than rental ever was. We were contemplating proceedings including the bank, and they really said, 'We'll relieve you of the shortfall but you can't involve us in any other proceedings.' These clients had quite a good case for compensation available to them, as against other parties. But the position of the bank was really: 'We won't hold you liable for this amount of money but you can't involve us in anything else.' That was a barrier for these clients because they had to choose between risking to get something back or taking a simpler option of just the bank agreeing not to proceed. There are other parties out there, really culpable parties, who are getting away with it and continuing in the conduct because the client had to face that risk between those sorts of options. The bank's position of 'Don't involve us or we will take this offer away' really led to that client having to make a hard choice.

CHAIR: I might open it up to others. Ms Pinnock, Ms Matthews, you have experience dealing with clients on a daily basis. It must be extremely pressured, difficult and emotionally challenging sometimes to have clients who have important cases or important matters to try and have resolved, when, from what you have said, ultimately they cannot because, for instance, they are saving up money for a process server's fee or they end up having to just not continue. To what extent do your services feel under pressure to try to somehow fund some of those disbursements yourselves? How do you manage? What are the effects of seeing people who just cannot take the steps that they need to take to resolve these things?

Ms Matthews : Unfortunately, frequently those needs just remain unmet. We do not have resources to meet the disbursements of clients. In Victoria, Victoria Legal Aid has been under a great deal of pressure and has withdrawn funding in a large range of family law matters, which has been really most unfortunate. Even prior to this last lot of changing guidelines, it had been very strict on the interpretation of its own guidelines. Typically for clients that we might be seeing, we say: 'We will run your matter, but we are not court advocates; we are not going to be running your contested hearing in court.' With the level of dysfunction in the relationships of some of our clients—mental health issues and a number of other reasons—they will require a judicial decision. We need to get those people to dip into their grandparents' superannuation or savings to pay for their fees. If they have received some sort of financial assistance like that, then Victoria Legal Aid will determine that they are a 'financially associated person' and then they will not be able to provide them with any funding. If you get some money from somewhere, it precludes you from getting some money from somewhere else.

Certainly there are people who are unable to proceed or who are going into court for final hearings who are unrepresented. Victoria Legal Aid is unable to assist people at all in property matters that need to be issued as court proceedings. So there are a number of people who are not assisted at all in those matters. We only have limited capacity for casework. We cannot take on all the matters that come in our doors, so there are a number of people who are just going to have to proceed in the court process without any consistent legal assistance. They may have access to duty lawyers but not to consistent representation or assistance with their documentation. Adding the extra burden of increased fees on to all that is just a further disadvantage. I cannot say that those things are as a result of the fees, but the increase in fees needs to be put in the context of the pressure that services such as ours are under and the pressure that Victoria Legal Aid is under as well.

CHAIR: Ms Pinnock, do you want to comment at all?

Ms Pinnock : Just to endorse what Helen has said, particularly about the impact of fees and disbursements on clients. I am sure all CLCs are in the same boat. We are all fairly underresourced and we certainly do not have the capacity to assist clients with the payment of disbursements. In some very, very limited circumstances where we have had a client who for one reason or another has absolutely had to pay a disbursement, we have paid it on their behalf and then required them to pay it back to us when they are able to do so. We do not do that very often, for obvious reasons, but there are some extreme circumstances where we will do that. But generally speaking we say to clients that they are responsible for their own disbursements. Unfortunately that is the nature of our funding.

CHAIR: Ms Matthews, I think you mentioned that you offer assistance to people who are described as low-income earners, earning up to $25,000 a year.

Ms Matthews : We do not necessarily have a cut-off. We collect information as to their income, both the source and the level. We offer advice to people by telephone and through drop-in clinics where there is no means test applied; it is just a contact—

CHAIR: Let me just take you to someone who is on $25,000 per year. I have my calculator out. That is $480 a week, so I guess after tax it might be $400 or something like that. I am just guessing. It is not a princely sum.

Ms Matthews : No.

CHAIR: I am just getting a sense of exemptions and waivers. Even leaving aside large debts and things like that, would someone on that sort of income be likely to get a waiver or an exemption?

Ms Matthews : Yes. They would get the exemption for the filing fees except for divorce. The registry we most frequently use is the Melbourne registry. Certainly they will give us an exemption with some correspondence from our office saying they are a client of ours. If somebody has received an exemption at the beginning, they will continue that through the process. There are some people who we take on at a very late stage in the matter because they have previously been privately funding their proceedings and they are no longer able to do that. Those people still have to come up with the setting down fee and the daily filing fee, which went up with the last round of increases and it can be quite difficult for people to come up with at that, having already spent significant sums of their money on that matter.

CHAIR: The point you made earlier which was of interest to me because of my background of having worked in dispute resolution in the family law area was that mediation settlements are not enforceable legally unless they become consent orders of the court. That is, again, not an optional thing. In a large number of matters where there have been difficulties resolving the dispute and coming to that agreement it is difficult to have any certainty that it will be abided by. I imagine that is quite a common outcome that you would be assisting your clients with. I have just checked and I think the cost of that would be $145 for an initial application for a consent order in the Family Court.

Ms Matthews : It only proceeds in the Family Court. The consent orders that they are referring to are when there are no issues proceedings. The only documents taken—

CHAIR: Essentially to convert a consent order into a formal order.

Ms Matthews : Yes.

CHAIR: But, as you said, often perhaps that would be subject to an exemption.

Ms Matthews : No.

CHAIR: What would be subject to the exemption, now that we have gone to the zero exemptions?

Ms Matthews : Originally I am not quite sure when they introduced that. To encourage consent, there was no fees that applied to consent applications, but that changed a few years ago. The problem is that for that sort of application to be done, the parties have already reached agreement. We are frequently seeing people where the other party will not engage at all. The only way that anybody can do anything is by issuing proceedings because then even if a party does not engage you can get orders in their absence. We have proceeded for some women who have no access to superannuation or no significant superannuation of their own, which is a very common pattern in the world of superannuation, to try to get a split of superannuation from their former partner. They have to issue proceedings. We have to get the information from the superannuation fund. We have to proceed without that party engaging. We have to get the registrar put in the place of the husband to process the whole matter. It is the only way that that person is able to access some sort of improved financial security or some funds that they can apply to take out immediately on the hardship grounds.

CHAIR: It is a lot of work, isn't it? And as you said it may be a very small sum but it may be the only asset of the relationship. Also—and this is technical, I suppose—if an exemption is granted is that then good for the entire proceedings or do you need to apply at different stages to have the—

Ms Matthews : There has been some inconsistency among the registries. But we are managing to have that consistently applied.

CHAIR: Thank you for your evidence.