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Thursday, 6 October 1983
Page: 1417

Mr LIONEL BOWEN (Minister for Trade)(10.19) —I move:

That the Bill be now read a second time.

This is a Bill to amend the Family Law Act 1975 to enable regulations to be made prescribing a scale of costs, which I shall refer to as the new legal aid costs scale, regulating payments to private legal practitioners acting in legally aided matters arising under the Family Law Act 1975 and the family law regulations. The Bill also enables the Commonwealth to make payments to the States and the Northern Territory, and to relevant legal aid bodies, subject to certain conditions, being conditions relating to the provision of legal assistance in respect of matters under the Family Law Act and regulations that are referred by legal aid bodies after 1 November 1983. I will more fully explain the operation of the Bill later in the speech.

The Bill is a Budget measure designed to enable steps to be taken by the Commonwealth to contain the substantial increases in legal aid expenditure that are being experienced. Honourable members will be aware that, on numerous occasions since this Government assumed office, the Attorney-General (Senator Gareth Evans) has made public statements expressing his very real concern at how expensive legal aid is proving to be. While Commonwealth payments to private legal practitioners acting in legally aided matters have risen from $14.679m in 1979-80 to $32.426m in 1982-83, which represents a cumulative increase of 64 per cent in real terms, the cumulative increase in the number of legal aid cases referred to private legal practitioners has been only 28 per cent in the same period. The actual figures for expenditure in 1982-83 have only just become available, and it is acknowledged that the 64 per cent increase in cost is less than the figure of 80.2 per cent which the Attorney-General had foreshadowed earlier this year, based on the then estimated expenditure for 1982-83. Nevertheless, the amount of $40.144m appropriated in the present 1983-84 Budget for payments to private legal practitioners does represent an estimated cumulative increase in payments in real terms of 82.1 per cent since 1979-80, notwithstanding that this year there will be no further increase in the number of legal aid matters able to be referred to private legal practitioners. In short, while the number of referrals has not increased by much in the past three years and is not now increasing at all, expenditure on referrals continues to grow.

In the light of these trends, and against the background of the pre-eminent role that family law matters play in Commonwealth legal aid expenditure, this Bill is brought forward with the express intention of restraining the rapid increase in that expenditure. It is an essential measure. Without it, the Commonwealth will very soon confront an impossible task in even being able to sustain the funding for the existing number of legally-aided matters handled by private legal practitioners and for which it is responsible, let alone being able to meet the ever-growing need for legal aid. Honourable members may be aware that under the agreements that exist between the Commonwealth and the States of Victoria, Queensland, South Australia and Western Australia, the Commonwealth has a continuing obligation to provide funding that will enable the legal aid commissions in those States to provide a level of legal aid activity equal to that carried out by the Australian Legal Aid Office in the respective States prior to the operations of the Office being taken over by the commissions .

In the present Budget, the Government has increased legal aid funding by 15 per cent in real terms in order to meet an expected growth of 12.5 per cent in the level of demand for legal aid in 1983-84. In making this increase, the Government has managed to maintain at its existing level the number of legal aid referrals that may be made this year to private legal practitioners. Provision has also been made for the appointment of extra salaried staff in the Australian Legal Aid Office and legal aid commissions. Preliminary figures indicate that approximately 54 extra salaried lawyers may be able to be employed throughout Australia, together with approximately 43 support staff. These initiatives reflect the Government's commitment to ensuring that within available resources opportunity is given to as many persons as possible to obtain access to the law. They also reflect a redressing of the balance in the proportion of legal aid work done by private and salaried practitioners respectively, while clearly recognising the central and continuing role of the private legal profession in the delivery of legal aid services.

The Government's problem is simply and starkly this: The demand for legal aid is outstripping the capacity of the Commonwealth to fund legal aid in the Federal area. In these circumstances, the spotlight inevitably falls on the cost of family law matters. In 1982-83, when $32.426m was expended by the Commonwealth in payments through the Australian Legal Aid Office and the legal aid commissions to private legal practitioners, $20.3m or 63 per cent of those funds was expended in connection with family law matters. Family law is the biggest single consumer of legal aid and as such necessarily becomes the first priority in a review of legal aid expenditure.

While this Bill will enable the Commonwealth to restrain the growth of legally aided family law expenditure, it should not be thought that this represents the sole response to the critical burdens placed on the legal aid budget. Since assuming the portfolio of Attorney-General, Senator Evans has initiated a general review of legal aid and the role of the Commonwealth in the delivery of legal aid services. As announced following the Budget, the Government has approved the establishment of a small legal aid task force to explore cost- effective methods of legal aid delivery throughout the country. One important question to be addressed is whether all the family law cases which currently receive legal aid funding really require lawyers and legal advice for their resolution, or whether instead there is not a more cost-effective method of resolving family law disputes. In seeking answers to this question, the Attorney -General has set in train an examination of the various options available for possible alternative advice and dispute resolution facilities. The Attorney- General has asked the Family Law Council and the Commonwealth Legal Aid Council to assist with this examination.

Returning to the cost of legally-aided family law matters, material provided to the Attorney-General's Department by the various branches of the ALAO and by the legal aid commissions, shows a clear discrepancy between the average cost of a family law referral depending upon which body has funded the matter. For instance, in 1982-83, the average cost of a family law referral funded by the ALAO was $469 in New South Wales and $429 in Tasmania. By contrast, the average cost of a family law referral funded by the Legal Aid Commission of Queensland was $593, while matters funded by the Legal Aid Commission of Western Australia had an average cost of $858. From information provided by the Legal Aid Commission of Victoria the relevant figure is estimated to be $834. Most of the State commissions have adopted family law costs scales based on the scale of costs payable for family law matters under the Family Law Regulations, with the rate of payment set at 80 per cent of that scale. Practitioners in Queensland and Western Australia also have the alternative of submitting lump sum accounts to the commissions. The implication of these figures is strong and clear: One method of restraining legal aid cost increases in the family law area is for all relevant legal aid bodies in Australia-and not just those in the ALAO jurisdictions, namely New South Wales, Tasmania and the Northern Territory-to apply the ALAO family law legal aid costs scale. It has been estimated that, if the ALAO scale were to be adopted by all Commonwealth funded legal aid bodies, savings to the Commonwealth would be at least $4m per annum after three years operation of the scale.

Honourable members may be aware that earlier this year the Attorney-General gave notice that he was considering such a move to a uniform scale. He wrote to the State Attorneys-General, the legal aid commissions, the Law Council of Australia and associated legal professional bodies seeking their comments on the proposal. In response, he has received extensive comments, both written and oral , from those persons and bodies and also from a number of private legal practitioners. In addition, officers of the Attorney-General's Department attended a meeting with the Law Council's Family Law Committee in July 1983 to facilitate discussion of the proposal. All comments received have been carefully examined and considered by the Attorney-General and by his Department. A detailed response to the comments was given by the Attorney-General in his second reading speech in the Senate on 15 September 1983. This Bill will enable the incorporation of the ALAO costs scale, with certain modifications, into the Family Law Regulations. The new scale is to apply to all family law matters referred by legal aid bodies on and from 1 November 1983, but not to work done after 1 November in relation to matters referred before that date which will be subject to the pre-existing scale.

For the benefit of honourable members, I will outline the basic differences between the ALAO scale and the scale of costs currently payable under the Family Law Regulations. The first noticeable difference is that the ALAO scale has a broader definition of the basic composite amount that covers all work ordinarily involved in the preparation of an application for hearing. This includes all attendances, preparation of documents, perusing relevant documents furnished by the solicitor's client or documents in reply, all necessary attendances at court or at the office of the court, including attendance at court on the hearing of the matter for one hour, and furnishing the solicitor's client with copies of any decree or order obtained. The ALAO scale allows payment for additional work not included in the basic composite amount to be made where that work has been reasonably and necessarily performed for the purpose of the conduct of the matter. Other essential respects in which the ALAO scale differs from the Family Law Regulations scale are that it provides for payment of a basic composite amount for work done in courts of summary jurisdiction; applies an hourly rate of payment for professional work, with no regard to Schedule 3 of the Family Law Regulations-under the Regulations scale, it can happen that solicitors achieve a rate of costs far in excess of the prescribed nominal $62 per hour; does not ordinarily allow for payment for the first two hours waiting at court; does not allow for payment in respect of time spent travelling to and from court; and provides for reduced hourly rates when the solicitor is instructing counsel.

I point out to honourable members that the Attorney-General has closely examined the ALAO scale and he has approved certain modifications to it. The first modification will enable a clearer definition to be given of the scope of work covered by the term 'basic composite amount', as it is defined in the legal aid scale, when assessing whether additional fees might be payable in a particular matter. Secondly, the fees payable to solicitors appearing in court as advocate, but not when instructing counsel, will be calculated now at the standard rate of $56 per hour instead of the reduced rate which operates at present. Thirdly, in those instances where the legal aid body would otherwise approve the briefing of counsel and the solicitor representing the legally aided person chooses to appear as advocate in lieu of counsel, the higher rate of $70 per hour will be payable in respect of the time the solicitor appears as advocate.

The experience of the ALAO scale as it is currently applied has been evaluated and an assessment made of the likely impact that the new legal aid scale will have in the commission States and in the Australian Capital Territory. The Attorney-General is aware that introduction of the new legal aid scale may give rise to unforeseen difficulties and it is in any case desirable that a new scheme be reviewed once it has been in operation for some time. In the case of legal aid referrals, a clear picture of new trends does not become apparent until at least two years after commencement of operation of a new scale, due to the time that must elapse before a sufficient number of accounts are rendered. Accordingly, it is proposed that a review of the operation of the new scale be commenced at about 1 November 1985, when approximately 70 per cent of accounts will have been rendered. This review will, of course, be facilitated by the ability of the national legal aid computer system to provide comprehensive information in relation to all legal aid matters.

As to the specific provisions of the Bill, it will amend the Family Law Act 1975, but has been introduced separately from the Family Law Amendment Bill 1983 , which may still require a good deal of time for its parliamentary passage. The present Bill is a Budget measure and the Government is obviously concerned to ensure that the estimated legal aid savings are achieved as soon as possible. This Bill does not provide for any new amounts to be appropriated, as the relevant funds are contained in Appropriation Bill (No. 1) 1983-84 currently before the Parliament.

The Bill effectively contains three parts. First, in proposed new section 116A it enables the Commonwealth to make payments to a State or the Northern Territory by way of financial assistance for the provision of legal assistance in connection with matters arising under the Family Law Act 1975 or Regulations, on conditions specified by the Attorney-General that relate to the provision of legal assistance in connection with family law matters. This is the legislative framework that would enable the Commonwealth to make section 96 grants to the States for family law legal aid purposes. If the specified condition is not fulfilled, the Attorney-General may require repayment to the Commonwealth of a specified sum. This is the usual provision accompanying tied section 96 grants.

Secondly, in proposed new section 116B the Bill enables payments made by the Commonwealth in connection with the provision of legal assistance under the Family Law Act 1975 or the Regulations to be made to legal aid bodies subject to conditions determined in writing by the Attorney-General relating to the provision of legal assistance in family law matters. The reliance here is on the section 81 appropriation power of the Constitution. The Bill also provides that where a legal aid body pays to a legal practitioner acting in a family law matter an amount in excess of that permitted by the legal aid scale, or where a specified condition attached to funding from the Commonwealth has not been fulfilled, the Attorney-General may determine that the relevant legal aid body or other person, authority or body to whom the payment was made is liable to pay or repay to the Commonwealth a specified amount.

Thirdly, the Bill enables regulations to be promulgated that prescribe the amounts that shall be paid by Commonwealth funded legal aid bodies to private legal practitioners acting in legally aided matters arising under the Family Law Act 1975 and the Family Law Regulations. The constitutional heads of power primarily relied on here are those which support the Family Law Act itself, namely, sections 51 (xxi) and (xxii) relating to marriage and divorce. The amounts will, of course, be those contained in the new scale which I have already described.

The Government believes there is ample constitutional power to support the implementation of the new scale by means of the regulations. If, however, this were to be the subject of a challenge, the Government would move immediately to the section 96 mode of funding to ensure that the new scale was enforced. More generally, funding by means of conditional payments to the States has been sought by the legal aid commissions as a means of reducing the administrative inconvenience of the present system, which requires a series of advances and adjustments to be made quarterly each financial year. Although the format of section 96 grants has not yet been finalised and will not be introduced at this stage, the Government will be considering a move in the 1984-85 Budget to the funding of the commissions by way of section 96 grants. The Attorney-General will be giving further consideration to the mechanics of the funding process and procedures under which the grants would apply, prior to the next financial year, should that course be adopted. I commend the Bill to the House.

Debate (on motion by Mr Ruddock) adjourned.