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The case for funding legal services with public money

Andrew Hamilton |  07 November 2013

With the appointment of the federal Commission of Audit, suggestions for cutting government funding will be rife. It will intensify existing debate about the public funding of legal representation. At stake in this question are the use of public funds and the importance of access to law by poorer members of the community.

The question has arisen in many contexts. Mining groups have protested that it is not right for the publicly funded New South Wales Environmental Defender's Office to appeal against permission given to mine sensitive areas.

The Federal Government has said that it will no longer fund legal advice for asylum seekers. Those who appeal adverse decisions in the courts will have to bear the costs of government solicitors as well as their own.

Legal aid to people accused or found guilty of horrendous crimes is perennially controversial.

Governments and critics have argued that organisations receiving government aid should not publicly criticise Government policy, and certainly should not bring court cases that can undermine Government policy.

Finally, other models of legal funding for the poor have been commened as preferable to public funding. Salvos Legal, for example, passes on the profits earned from its commercial work to Salvos Legal Humanitarian for its unpaid work for disadvantaged clients.

The case against public funding in all these instances soon refers to taxpayers money. The phrase rightly suggests that public funds are collected for the good of society, and so should not be spent wastefully or arbitrarily. But it also connotes many of the principles and attitudes associated with classical liberalism.

Liberal theories defend the freedom of the individual against the tyranny of the state. It argues that political freedom depends on economic freedom – the right to buy and sell in a free and competitive market. The role of the State is to guarantee the conditions under which individuals can work competitively for economic prosperity and exercise their free choices unhindered. The free markets will guarantee national prosperity better than any state regulation, which only distorts the market.

In this view society is simply a collection of individuals. Taxation is seen as a distortion of the market that limits free choice. It should be levied only if those who pay benefit from it, as they do, for example through infrastructure.

In the market businesses and corporations count as individuals, with the result that regulation to protect the wages and conditions of employees from the unequal power of corporations is also an undesirable distortion of the free market.

Those influenced by these views often define the good of society in solely economic terms. Economic freedom is no longer seen as a means to the larger goal of political freedom but as goal that constitutes a good society.

From a liberal perspective the use of public money to fund free legal services to individuals is inherently undesirable. Even if the contracts are awarded under competitive tendering, the funding of the services is a distortion in the market. Ideally they should be left to the market to provide.

The support given to non-profit legal services, like other publicly funded community organisations, is also seen as regrettable. By definition they are less efficient than commercial organisations disciplined by a free and competitive market. It is axiomatic that a firm that competes in the free market and contributes its profits to serve poor clients would be superior to them.

To devoted disciples of the market, too, the existence of non-profit organisations is an irritant. Their reliance on unpaid volunteers, the financial and career sacrifice made by their workers, their reliance on philanthropic funding, and their decision to forego profits are an affront to the free market. They also challenge the identification of the good of society or the individual good with economic prosperity.

Following this line of thought it would also be wrong for publicly funded organisations to run legal cases against corporations. To use public funds in a way that delays mining would be a distortion of the market and hinder the corporation from competing economically.

The argument that publicly funded bodies should not bring cases that challenge government policy or criticise government policy, however does not seem consistent with classical liberalism for which State power was the enemy. But it may represent the mutation of liberalism into economic liberalism. The argument appears to assume that the government is a player in the market, that those who receive public funding are its employees, and that the government may impose restrictive trade practices on its employees, particularly to prevent them acting against their employer's interests.

In seeking to find coherence in the arguments commonly made against the public funding of legal services by tracing them back to a congeries of ideas about society and the economy. I do not imply that those agreeing with the arguments will hold all these ideas. But they appear to be the atmosphere in which the arguments might seem reasonable.

I agree wholeheartedly with the insistence that public money needs to be spent prudently and accountably and that governments always need to be kept honest. The points on which we may differ is whether community legal agencies should be publicly funded for their services, and what work they may properly do.

My premise is that human beings are not isolated individuals, but are inherently social. They can develop as persons only through relationships. The growth of each human being depends on the growth of others. Economic development should serve the human development of all people within society, especially those who are disadvantaged. It is the business of the State to ensure this kind of development.

From this perspective the phrase 'taxpayers' money' is misleading. Public funds come from persons who are constituted by their social relationships. So taxation is an expression of the social reality of human beings and of their mutual responsibility for the development of society. It also acknowledges that those who enjoy financial success build on social structures that they inherit. Their taxes repay that debt for the benefit of those who follow them.

The state can foster the development of society in a variety of ways. But working through non-profit community groups to support the disadvantaged can be particularly effective. The altruistic people they attract can build strong relationships with those whom they serve. The strength of small groups, too, is the mark of a strong society.

These groups, too, may be as effective, innovative and knowledgeable as commercial firms. Stories of virtue and horror abound in each sector. Large firms may provide economic efficiency for government, but this is not the same as social effectiveness.

For this reason non-profit organisations that fund their altruistic work through a commercial arm are not intrinsically superior to publicly funded non-profit ones. The option taken by the Salvos Legal certainly works well. But legal groups that work for the most needy within a single jurisdiction may help more people and work more effectively if they can rely on public funding.

These are questions of detail. The central issue is whether legal advice should be publicly funded. I believe it should be funded is that equal access to the law is essential for political freedom and for economic freedom. If citizens are to compete on level terms economically, the market must not be distorted by greed, fraud and force. Equal access to the law is necessary to prevent the powerful from acting with impunity.

Effective administration of the law also demands that legal advice be available to the poor. If people are forced to defend themselves in complex matters, judges are forced to instruct them about the law. Trials then greatly lengthen.

The provision of legal services cannot be left entirely to the market precisely because the rule of law is the necessary condition for the market to be free. Access to the protection of the law is also a condition for the respect for human dignity in society.

That is true particularly where the actions of large corporations have injured people with small resources. To regard these as individual players in the market for legal advice, and so to oppose public funding of legal advice as a market distortion is absurd. It would enable corporations to use the law as a weapon to deal with weaker individuals. Economic freedom would then not support individual freedom but corporate tyranny.

Asylum seekers in Australia are also entitled to expect to be treated under the rule of law. Because of the complexity of refugee law, difficulties with language, the natural mistrust that people fleeing government persecution have in officials, and the risk of bias in decision making, they need legal advice. This requires government funding.

On both liberal and communitarian premises non-profit profit organisations which receive government funding should not be prevented from using their own funds to make public criticism or to represent those in dispute with the government.

Of course a legal agency awarded a government contract for specific work would be required to complete and account for the work. But it is as legitimate for them as it would be for their commercial competitors, to allow in their contract for administrative costs and for contingencies, and to apply the savings to fund other legal cases. Where public funding is not tied to particular projects, as in the case of the New South Wales Environmental Defender's Office, work can be undertaken that fits within the mission of the organisation.

Agencies may also be subject to ethical guidelines of their own. For example, some would not take on cases which they judge they cannot win. They would go to court only to bring their clients relief from the harm done them by administrative decisions, not simply to make a political point. In advocacy against policy they would use the wisdom gathered by their work but not use their clients to dramatise the case they make.

But because freedom of speech is an inalienable right and central to a free society and to a free market, governments must not restrict agencies from criticising policy in their area of expertise. The government's primary role is to ensure the conditions for the development of society. In its relationship to those through whom it works it is not primarily that of employer to employees, but the custodian and fellow servant of the common good. It is government's duty, and in its interests, to promote free discussion of the ways in which the common good is best served, and whether it is currently well served, by its policies and their implementation. 


Andrew Hamilton headshotAndrew Hamilton is consulting editor of Eureka Street.



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Submitted comments

I think it wrong for a government funded organisation to use government fund to go to court against the government. If a government funded organisation sees that there is a need for a change in a government policy, they must air their concerns constructively in appropriate forums. With Love! Jyo

Jyo Aadarsh 07 November 2013

Even though the separation of powers is only implied in the constitution, it is well established that only the judiciary can decide on matters arising from legislation. Any person or legal entity has a right to test legislation in court. This would include government funded bodies, should the parliament be so unwise as to affect them adversely through legislation.

John Vernau 07 November 2013

In Ontario, in a large city, the power conferred by government funding allows legal aid lawyers to separate, according to their undisclosed, unadjudicated opinions, the deserving from undeserving claimants. By the way, being outspoken makes you undeserving.

Name 04 February 2014

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