Legal Aid Funding and Inflation

The recently announced increase to the Legal Aid budget confirms that legal aid expenditure should increase by approximately 41 percent for 2019/20. It is expected that the increased funding will be used to pay for anticipated increases in the cost of legal aid cases.

The headline figure sounds impressive but, as ever, there is a context to be considered.

For example, the original intention was for the financial eligibility limits for legal aid to be reviewed annually to take account of general price movements and every two years to take account of increases in litigation costs.

When the government proposed to adopt the consumer price index as the basis to adjust the financial eligibility limits in about 2017 this was not the correct comparison for the purposes of adjustment. Private litigation costs (for civil proceedings) increased by approximately 44 percent at the beginning of 2018 after the long-awaited adjustments to benchmark solicitors’ hourly rates for court work were announced. Even that headline figure was less than the approximately 55 percent increase in hourly rates recommended in 2013 by an independent report.

Therefore, real inflation measured by the cost of legal services (to reflect, for example, commercial rents and employment costs) has increased significantly more than the price of consumer and household goods. In reviewing increases to the financial eligibility limits for legal aid a more appropriate comparison would be with the increase in the cost of court proceedings if the individual were employing lawyers privately – not with the increase in the cost of a basket of groceries.

The number of litigants in person in court cases in Hong Kong is probably not unrelated to the financial eligibility requirements. There is also the point that good legal representation assists the courts and over time helps develop the law for all stakeholders.

Attention also now turns to other aspects of the legal aid scheme, including:

  • expansion of the scope of supplementary legal aid generally and, in particular, to include claims against the incorporated owners of multi-storey buildings (topical in light of the increased risk of extreme weather conditions) and claims to protect consumer rights arising out of the sale of goods and services; and
  • improvements to processes for payment of assigned solicitors’ costs, summarised in the President’s Message in the April 2019 edition of the Hong Kong Lawyer:

“Streamlining Work Process

… The substantial delay in assessing the final bills of costs, the lack of transparency in assessments of bills, prolonged delay in bills payments, duplicated or excessive requests of information during the bills assessment process, eg the itemised bills, index and paginated bundle of documents referred to in the narrative bills, and others are among a long list of comments on the scheme by practitioners. These inadequacies are not insurmountable.”

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