Access to justice problematic
The Chief Justice of the Supreme Court, Helen Winkelmann, has recently spoken out about the difficulties that low and even middle income earners have in accessing the justice system.
A strong advocate of access to justice, she has said: ‘‘Access to justice is the critical underpinning of the rule of law in our society: it is the notion that all, the good, the bad, the weak, the powerful, exist under and are bound by the law. That condition cannot exist without access to courts, and without the ability to obtain a just resolution of claims before those courts. Cost, delay and a lack of representation all can act as barriers to justice.’’
Winkelmann has challenged the legal profession to come up with models that meet the needs of all parts of society, not just those who can afford it.
The Employment Relations Authority was established in an attempt to create a forum where employees and employers could have their claims heard, relatively quickly and cheaply.
It was set up as an inquisitorial body, with powers to investigate and make decisions, in contrast to the adversarial approach of traditional courts.
However, despite these objectives, access to the authority has become increasingly out of the reach of many. There are a number of reasons for this, but key among them is that the cost of representation in an authority hearing is too high compared to the remedies that are likely to be awarded.
Typically it costs around $20,000 in legal fees to be represented in an authority hearing, while an employee who is successful in a personal grievance claim may expect to receive a minimum of three months’ lost wages plus compensation for humiliation and distress of around $10,000.
When you factor in the stress and risk associated with pursuing a claim against an ex-employer, the cost-benefit doesn’t always stack up.
This has led to employees, in particular, seeking free support from Community Law Centres and Citizens Advice Bureaus. But when these services come up against a corporate employer with experienced and expensive lawyers, the result is a David and Goliath situation.
It is hardly surprising, therefore, that many claimants feel compelled to settle, basically for whatever they can get.
The chief justice has hinted that lawyers should reconsider their fee structure. But given that lawyers are largely in a monopoly situation, and can charge exorbitant fees, it is unlikely that they will, willingly, lower their rates anytime soon.
This means that in order to make litigation a reasonable option for claimants, the rates of compensation need to increase.
Further, successful claimants should also be entitled to a reasonable contribution towards their costs.
Over the past couple of years the Employment Court has been sending clear signals that compensation should rise.
In a 2017 case, the court awarded a former Waikato District Health Board $20,000 in compensation for the hurt and humiliation she suffered as a result of a flawed restructuring process that resulted in the termination of her position.
In her decision, the chief judge of the Employment Court, Christina Inglis, proposed a banding approach to assessing levels of compensation for humiliation and distress. Band 1 should reflect low-level loss or damage, band 2 reflects mid-range loss or damage, or band 3 reflects high-level loss or damage.
This approach reflected an earlier conference paper presented by the chief judge, in which she suggested that band 1 claims should be awarded between nil and $10,000 in compensation, band 2 between $10,000 and $50,000 and band 3 $50,000 and over.
Compensation has been rising since 2017, but not quickly enough.
The other part of the equation is the cost of litigation. Currently the authority applies a ‘‘tariff’’ based approach to awarding costs to the successful party in proceedings. This is based on a payment of $4500 for a one-day authority hearing, plus a further $3500 for each day thereafter.
However, the costs of litigation are generally far greater.
There is currently consideration being given to abolishing the practice of awarding costs against the unsuccessful party in authority proceedings as this could discourage employees from pursuing cases.
However, the flip side is equally true, because if a successful claimant does not receive a meaningful contribution to the actual costs incurred in litigation, the win is likely to be a pyrrhic one.
There is a strong case, therefore, for increasing both the compensation and the costs contribution given to the successful party. This will ensure that the outcome for employees bringing genuine claims is worthwhile, whilst disincentivising tyre kickers.
Access to justice is a core element of a fair and balanced society.
At the same time, the courts must ensure that compensation and cost awards given to successful litigants make the pursuit of justice worthwhile.