Media Release 19 July 2012

Community Law Provides “Sound Value For Money”

“For an investment of $10.97m per year the NZ tax payer is receiving a return of at least $36.23m per year and possibly as much as $43.53m per year from Community Law”, says Elizabeth Tennet Chief Executive of Community Law Centres o Aotearoa.

“At a time of Government introducing contestable funding through tendering it has been proven Community Law already delivers low cost legal services of value to the taxpayer.”

A cost benefit analysis by the New Zealand Institute of Economic Research (NZIER) of the service provided by community law centres throughout New Zealand concludes that they provide sound value for money.

Twenty-five centres around the country provide legal services at no cost to people who are unable to meet the cost of a private lawyer or do not have access to legal aid.

Their national organisation, Community Law Centres o Aotearoa (CLCA) commissioned the cost benefit analysis to obtain more hard data about the economic value of Community Law services. Chief Executive Elizabeth Tennet says with the Government seeking to introduce a contestable funding regime it is important to be able to show what is delivered in terms of value for money.

The NZIER analysis shows that that the centres deliver $36.23m of benefits just from their casework with clients. This represents a cost-benefit ratio of 1:5.4 for casework services (based on the $6.7m portion of the Government investment of $10.97m which is provided for casework services).

In the July 2010 to June 2011 year, the Community Law Centres (CLCs) worked on cases for 49,243 clients. Taking its cost basis as 75% of the average cost of the lowest cost proceedings of the Public Defence Service, which NZIER describes as a ”frugal provider of legal services”, NZIER conservatively estimated that the value of these cases was $36.23 million in that year.

Community Law is provided in the CLCs by paid staff and a large network of over 1200 volunteers. NZIER estimated that voluntary services from lawyers, law students and non-legal people who assist with administration are worth $3.75 million a year. CLCs are also able to leverage an extra $108,544 in volunteer legal services from its network of law firms providing additional pro-bono services.

It is a model, NZIER notes, which is reliant on staff and community support built up over time and it warns it is important that changes to the way that centres operate don’t threaten that support, with potential consequences for the viability of the low cost model.

The NZIER report emphasizes that the CLCs deliver a lot of other benefits that cannot be so easily quantified. While casework takes two thirds of staff time, it accounts for only a third of all client interactions. In terms of total services in the 2010-2011 year, over 174,000 hours of legal services were directly provided to over 144,000 clients.

The information and education given to people to help them resolve disputes themselves is likely to provide significant benefits NZIER reports. Research has shown that early intervention offered by Community Law type services delivers quicker resolution of disputes and avoids costs to the justice system and flow on to the wider community and other government agencies.

“While we have been unable to quantify these benefits, we can provide some context regarding their potential scale. If the information and education services provided to the 95,000 New Zealanders in 2010/11 caused a one percent cost reduction in the courts system, then the CLCs would have saved approximately $7.3 million dollars.”

These benefits come at no additional cost and would only increase the fiscal benefit cost ratio.

A conservative view of the value of the CLCs is that, for a total public money cost of $10.97 million, they provide potential access to the justice system for approximately 20 percent of New Zealand households - nearly 326,000 households – if they have a dispute or concern that is not eligible for legal aid. “Māori and Pacific Island households are over-represented in this 20 percent. This suggests that the CLCs provide an important pathway to the justice system for Māori and Pacific Island families.”

Other social benefits from the services that the CLCs provide include improved justice system efficiency and increased confidence in the justice system and rule of law as an institution.

Elizabeth Tennet says the NZIER results reinforce what CLCA has been saying about the importance of investment in early intervention to reduce stress for individuals and families and to reduce costs for the courts, justice system and wider community.

“We know that Community Law works because of the feedback from clients, the number of people we serve and because of the way each centre has been able to grow support in its own community, in its own way.

“With the Government’s introduction of contestable funding through tendering CLCA is actively working with Government and the CLCs to ensure any new model supports excellent service delivery and that CLCs are in the best position to win the tenders.

“In these economically challenging times, it’s more important than ever to have an effective, sustainable and collaborative network of strong and capable Community Law Centres delivering quality legal services to meet the needs of those in their communities who would otherwise not have access to the law. We have this network and we are thrilled that the NZIER has been able to show the value of early intervention and that Community Law Centres are a good investment of taxpayer funding,” Ms. Tennet says.

For more about Community Law see www.communitylaw.org.nz

ENDS

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