Legal Aid Board: Annual Report

JUSTICE AND CONSTITUTIONAL DEVELOPMENT PORTFOLIO COMMITTEE
4 June 2001
LEGAL AID BOARD: ANNUAL REPORT

Chairperson: Adv J H de Lange

Documents Handed Out
Letter to Legal Aid Officers at Branch Offices, Clinics and Magistrate Offices: Changes to Legal Aid Tariffs and Judicare System (29/03/01)
Legal Aid Board Chief Executive Officer's Progress Report (attached)

SUMMARY
The Committee met with three representatives of the Legal Aid Board who presented a report on Legal Aid Board. The Board's presentation centered on the explanation of the Board's new budget structure. The Legal Aid Board is in the process of restructuring, setting up clinics and establishing "Justice Centres". These "Justice Centres" act as 'one stop shops' for people who need legal representation.

The effort to restructure comes as a result of the Board trying to reduce monies being paid to Judicare. Instead the Board envisages a situation where the Legal Aid Board would provide the majority of legal representation in criminal matters with only a minimum amount of cases being allocated to outside institutions, such as specialists and Judicare.

The Budget was scrutinised as a result of the fact that it was the first time it had been formulated in a structured manner. Furthermore, there were line items that were a novelty to the Committee. Many of these were explained.

It was necessary for the Board to create a whole new budget structure primarily because the Board needed to be able to establish an accurate picture of the Board's costs and to create funds by minimising costs and payments. Money saved is to be used to open additional clinics.

Amendment to the Legal Aid Act were also discussed, specifically in relation to the reduction of tariffs payable in terms of the Act.

Despite their good work, Adv de Lange still felt it necessary to express his dissatisfaction at the fact that Legal Aid Guides had been passed by the Committee three years ago, but to date have not been implemented. These guides have since been rendered obsolete.

MINUTES
Adv de Lange highlighted issues he wished to be discussed in the meeting. He specifically asked the Legal Aid Board representatives to explain measures that have been established to bring legal aid back into working order. Adv de Lange wanted to know specifically what financial measures had been put in place to accomplish this task.

The Legal Aid Board was represented by Mr Ally, the CEO of the Legal Aid Board, Mr K Naidoo, the Chief Financial Officer, and Mr P Brits, Director of the Centre for Special Projects.

Mr Ally said that the Board came from a position where the institution was in a downward spiral. He said the Board was plagued by escalating debt, outstanding payment, a complete lack of senior and middle management and dependence on independent advisors. Mr Ally said the position was turned around in the recent past, with the appointment of a new executive team.

Mr Ally said the report that was presented attempts to detail the actions taken by the board since January this year. The report also detailed the Boards new business plan as well as their budget, which was completed on time for the first time in many years.

The Board's financial situation has been stabilised to improve the administrative situation. The Board has also been restructured to withstand present as well as future problems. The Board now applies a performance management system instead of an objective or outcome based system.

Mr Ally said that the Board is in the process of finalising the Auditor Generals statement for the year 2000/2001. Also, Justice Centre and branch manuals have been produced. Mr Ally explained that the Board had produced a draft information technology plan, which is to be finalised shortly. He said that this is very important in the context of the rolling out of the Justice centres and clinics. He said that it would be very important for these new centres to be able to operate as a single entity throughout the country. This is important as in the past the Board suffered a complete breakdown between different parts of the organisation.

Mr Ally said that the Board had produced a human resources plan. This was done to correct the situation where the Board did not invest in skills development for a lengthy period. Mr Ally said that they were looking at existing human resources and trying to rationalise these. He said many people could not perform their functions and had to be re-appointed.

Mr Ally also told the Committee that an internal audit unit had been established.

Mr Ally told the Committee that the entire human resources platform of the board must be defined. This had to be done to establish competency profiles and job profiles. People currently employed need to be empowered to do their jobs or find alternative jobs which they can perform competently.

At this point Adv de Lange asked Mr Ally what the parameters of the Boards mandate are. Mr Ally said that the Board applies a means test. According to this test if it is beyond a person's means to provide their own legal representation then the Board will provide such representation. A cut-off point is decided upon and people whose income exceeds this cut-off point do not qualify for legal aid.

Adv de Lange asked what kind of case would qualify for legal aid.

Mr Ally said that the Board concentrates on criminal cases with civil cases making up a very small fraction of the work done. This position was attributed to the cost of civil cases. In addition to this the Board also focuses its energy on matters involving women and children. Class actions have to be approved by the Board as do cases which are not ordinarily dealt with. Matters such as environmental justice are resolved taking a number of additional factors into account. The decision can be made by special delegates specifically empowered for that purpose or referred to the Board at a National level.

Adv de Lange asked to what extent the new Justice Centres excluded the need to appoint Judicare lawyers.

Mr Ally told the Committee that at times the Cape Town Justice Centre takes up 60% of all work generated.

Adv de Lange asked whether it was the Board's goal to manage 100% of work generated.

Mr Ally said that this was not the intention of the Board and that in terms of the Boards new structure, it could not manage 100% of the work. Managing 100% of the work would not optimize the functioning of justice centers. To do this, the centre would have to have specialists within its ranks, a position which Mr Ally said would not be cost effective. He said that some matters would always be Judicare matters and others would always best be dealt with by independent specialists.

Adv de Lange asked why the Legal Aid Board was in a position where it dealt primarily with criminal matters. He said that the move to capture all criminal cases by the Board would do away with public defenders. This move signified a departure from policy which provides for public defenders to defend all criminal matters. He said that in all other jurisdictions, legal aid dealt exclusively with civil matters and criminal matters were dealt with by the public defenders. Adv de Lange said that this system worked and it would take some convincing for him to see why the South African system should be different.

Mr Ally said that it was not a departure from policy but simply another route to get there. He said that it was a matter of semantics, and that a public defender would be located at every justice centre. Once again Mr Ally emphasised that the Justice Centres would be 'one stop' legal centres capable of dealing with a wide range of matters.

Business Management
The last centre was launched in March 2001. The next round of centres are to be established from August, with ten centres being setup in predominantly rural areas.

The Board is in the process of addressing historical issues and dealing with some that were neglected in the past, such as
capacity building
Information technology infrastructure
The provision of accurate management information
The issue of increased capacity in criminal appeals

Mr Ally said that the latter matter could easily cost the Board over R 100 million. He also said that the Board needed to establish a presence at all regional courts, another component of capacity building.

Adv de Lange asked how many cases each centre was obliged to handle.

Mr P Brits said that each person in the employ of a centre needed to conclude a minimum of twenty cases a month. He explained that this is the number of cases each employee needs to conclude and not necessarily the total amount of files that these people would be handling at any one time. He also stated that in reality better results were often obtained.

Adv de Lange said that this formula should be standardised at a national level so that costs may be readily established. Mr Ally told the Committee that the system was in the process of being changed. He explained that in the past Judicare was not easily controlled and costs were impossible to establish. The system is now based on a purchase order system where the risk liability is always readily ascertainable. In terms of this new system, all services are given a face value and orders are placed on an individual basis.

Mr J H Jeffrey (ANC) reminded Mr Ally that he said that the Centres would handle most cases and independent practitioners would be used for some. He asked which policy informed this position and on what basis it was decided that certain cases be outsourced.

Mr Ally said that it would be best for the centre to take up all matters within its capacity. However constraints will not allow this, so the Board needs to establish the core business of the centres. This will enable the centres to operate optimally within their capacity constraints.

Adv De Lange insisted that there was a fatal flaw in the construction of the centres. He said that the joining of civil and criminal claims would have a negative effect. There is no concrete provision to outline precisely what types of civil cases legal aid board is prepared to do. Adv de Lange called for a clear demarcation as to what type of civil work legal aid is prepared to handle. Adv de Lange said that in the absence of such provision, employees would engage only in work that they found favourable, namely civil work and criminal work would be neglected.

Mr Ally told the Committee that there is a 15% ceiling on the amount of civil work that a centre could engage in. A system is currently being put in place to ensure that this percentage cap on civil work is observed.

Mr P Brits said that a number of NGO's also undertake some of the civil work, but if criminal work is generated then public defenders undertake this work. Mr P Brits added that these NGO's are paid using funds provided by the Board. He said that in latest financial year the Board had spent just short of R 9 000 000 on fees paid to NGO's.

Adv de Lange wanted to know how these NGO's are monitored to ascertain whether they are doing the work and what their success rate is. Mr Brits said that this matter was controlled by fairly elaborate contractual agreements, as well as internal and external audits which determine the quantity and quality of the work. In terms of the contractual agreements, NGO's had to keep records for seven years as well as give monthly reports on cases concluded.

Mr K Naidoo commented on the financial impact of the new system and the impact of the justice centre. He said that all redundant systems and posts had been removed. The Board is undergoing a massive rationalisation process to remedy the dire situation of the past. He said that his Department is in a shocking state but currently there were attempts to remedy this situation. The new payment system has recently been implemented. The effect of this will only be felt in eighteen months time as a result of the backlog. This backlog is due to instructions being issued and since been lost track of. He said that in the past the Board made payments on 1400 Judicare files per day, whilst presently this number has been reduced to 400 files per day.

Mr G Magwanishe (ANC) asked for the Boards success rate in relation to criminal matters.

Mr Ally said that in the past the success rate was dismal. Adv de Lange said that these success rates could be deduced by looking at the success rates of the court's prosecuting. The Committee reached an estimate of about 20 to 30 percent. Adv de Lange reminded the Committee that this rate of success was on par with rates experienced all over the world. Adv de Lange added that legal aid cases often concern dire cases, and people are often convicted because they are guilty.

Mr J H Jeffrey (ANC) said that this success rate should be compared to the success rates of criminal cases represented by private firms.

Mr G Magwanishe (ANC) asked how the Board was assisting students complete internships.

Mr Ally said the Board employs 300 to 350 students for every two year period. Adv de Lange highlighted that some organisations call for one compulsory internship for all law students. He said that this was not necessarily a bad idea, as it was seen to be a working system in the medical profession. However, in the medical profession the hospitals are there for students to work in. Before this system can be applied in the legal profession, the legal aid clinics must first be established.

Ms F I Chohan-Kota (ANC) commented that if the Board wanted to build capacity then it should increase its use of NGO's. She asked this was being done, and if so, she requested that this information be presented in a report to the Committee. She added that if the Board was trying to build capacity it should not be necessary to outsource certain matters. Outsourcing prevented the opportunity for specialisation and capacity building.

Legal Aid Guides
Three guides have been passed by the Committee but never implemented. Adv de Lange was very disappointed with the fact that these guides had been brought into practice and had since become outdated. He said that the situation was an embarrassment to the Legal Aid Board as well as the Justice Committee.

Mr Ally reassured the Chairperson that three new guides had been produced and would be tabled by the end of June 2001, then passed on to the Department of Justice. Adv de Lange said that the board should take all the necessary steps to ensure a smooth process in the passing of the guides.

Legal Aid Board Act - Amendments
Adv de Lange asked if the Act had been amended to reduce tariffs paid to lawyers. Mr P Brits said that the Act was in the process of being amended and in some instances the tariffs had been reduced by more than half. Mr Brits said this was reflected in the final draft of the amendment bill.

Mr P Brits said that these amendments were being dealt with by a subCommittee to the Board. Other amendments concerned s 3 of the Act. These amendments sought to establish Legal Aid Board's indisputable right to provide legal advice. A further aim of the amendments was to ensure that the Board's board of directors, presently composed of eighteen members from predominantly legal backgrounds, be reduced to a smaller number, some of which would be representative of other professions. Where as the present board consists of exclusively non-executive members, the smaller board would consist of executive and non-executive members. Finally the amendments were necessary for the board to be able to appoint its own chairperson.

Adv de Lange hastily insisted that this is not and will not be allowed. The appointment of a chairperson is a function of the government and is never be done by the board of directors themselves.

Mr P Brits said that it was necessary to amend s 8. He said that the section allowed the Board to employ agents only with the permission of both the Ministers of Justice and Finance. Mr P Brits said it was necessary to change this section because it took up to eighteen months to complete the required process. Adv de Lange said that this position could not be changed, and it was the same for all other commissions and boards.

Finally, Mr Brits addressed the amendment of s 2 of the 1996 Amendment Act. Mr P Brits recommended that the legal aid guides be split into two parts. The one part would be the policy component outlining who would qualify for legal aid, under which circumstances. This section of the guide would be reconsidered by Parliament every year. Changes to this component would also require approval from Parliament. The second component would be the administrative guide which would govern purely administrative matters. This section of the guide would not need to considered before Parliament every year, nor would Parliamentary approval be needed to change this part of the guide.

Adv de Lange said that this matter will be considered and that the Committee will submit suggestions on the matter.

Mr Naidoo said the Board wished to be allowed more freedom to create posts and set its own salaries. This would be done to attract better people to work within the institution. All this would be done without placing any additional budgetary burdens on the Government, but would instead be done using existing monetary resources.
Adv de Lange said that this would not be possible. He said the position rested as it did for numerous important reasons. The position was as such to ensure the standardisation of both salaries and jobs throughout the state. If otherwise were allowed, people with equal qualifications would receive differing remuneration for doing the same jobs. If bodies could invent their own posts and decide the salaries on their own, resources would be drawn out of government in the form of former employees chasing better money.

Budget Process
Mr Naidoo told the Committee that in the past the budgetary process was very inaccurate. Many costs were omitted and others were unascertainable. Senior management has since scrutinised the budget and allocated new budgets for new things. The budget has been done in a completely new format. This was done to achieve a more accurate method of establishing true operational costs and to provide more accurate budgetary information. This would in turn lead to better, more accurate budgets being generated in the future.

Adv de Lange stressed that despite the budget being a novel one, measures should be put in place to ensure that too much money was not unnecessarily spent on one item. Adv de Lange suggested the establishment of a costing unit.

Mr K Naidoo told the Committee that measures have indeed been established to ensure that any one expenditure is justified and not unnecessary. Mr Naidoo also told the Committee that the Board was establishing a Management Activities Unit that would perform the function of a costing unit.

Dr Delport (DP) expressed concern about the formulation of the new budget. He said generally when an amount is budgeted for, this amount is frequently exhausted regardless of whether or not the expenditure is needed. In light of the fact that these figures are estimates and might not be required in their entirety, he asked how the Board will ensure that this does not happen so that true budgetary amounts can be ascertained.

Mr Naidoo said that measures would be put in place to ensure that this problem would be avoided. Some of the line items in the budget would be reduced or completely omitted at a later stage.

Adv de Lange said that perhaps it would be better if one fund were created instead of providing budgets for novel line items. Then if money were genuinely needed for these things, they could be drawn from this resource.

Increased Capacity to Appeal Against Criminal Conviction
The final matter discussed was the matter of increased capacity to appeal against criminal conviction. Mr P Brits told the Committee that this new position could cost the Legal Aid Board up to R 140 000 000 per annum.

Adv de Lange said that the new automatic appeal route chosen by the government would place an enormous burden on the Board and the Board therefore needed to explain their position to the state and request additional funds. Mr P Brits told the Committee that the board intended to free up additional funds through cutbacks. Adv de Lange said that the Board would not be able to 'free up' R 140 000 000 through cutbacks and would need to approach government.

Adv de Lange expressed the Committee's appreciation for the Board's hard work. Adv de Lange commended the Board on a task well done but reminded Mr Ally of the legal aid guides and the poor performance in this area. Adv de Lange warned Mr Ally that the guides needed to be passed so that they could be implemented. He said that he would follow the situation closely and would evaluate Mr Ally's professional capacity on whether or not these guides were passed and implemented.

The meeting was adjourned.

Appendix 1:
Legal Aid Board

May 2001

Chief Executive Officer's Progress Report

Introduction

This report is intended to reflect progress on the implementation of the 2001 business plan, following on the business plan report produced in the year 2000, in which the short-term challenges for the Legal Aid Board were identified and immediate steps to be taken outlined.

The challenges identified in the 2000 report were:

·         Escalating debt, a growing backlog of payments of outstanding accounts, and a lack of accounting integrity.

·         Imprecise calculations of the Legal Aid Board's current and contingent liability because of historically flawed data.

·         Criticisms by and compliance with the requirements of the Auditor General.

·         Inadequate management procedures and practices and a lack of senior and middle management staff.

·         Inadequate accountability by staff to the Board and to the profession.

·         Logistical pressures created by increased Constitutional and other statutory obligations.

·         The unaffordable cost of providing legal services to the poor through the judicare system, i.e. the system of delivery by payment to private practitioners.

·         Growing antagonism of the profession.

·         Dependency on consultants whose interests did not always coincide with the interests of the Legal Aid Board.

A number of strategies were then developed to deal with the above, ranging from the introduction of a new Information Technology system and software to the employment of an executive management team consisting of the Chief Executive Officer, Chief Director Finance, Director Human Resources, Director Judicare and Director Access to Justice.

The appointment of the executive management team was completed with the commencement of the Chief Executive Officer on the 15.01.2001, and the Chief Director of Finance on 02.01.2001.

The report covers sections dealing with Methodology, Problems, Objectives, Planning Process, Business Plan, Management of Implementation and Key Steps for the Future.

Methodology

·         Study of organisation's history and institutional knowledge (available Annual Reports, Board Agendas, Auditor General's Reports, Standing Committee on Public Accounts and Justice Portfolio Committee Reports.)

·         Organisational capacity review (infrastructure, management & governance, general human resource capacity.)

·         Analysis of business processes.

·         Functionality assessments in terms of efficiencies, effectiveness and value for money.

·         Financial management systems assessment, including policies and procedures.

·         Information management assessment.

·         Human capital assessment.

·         Compliance with legislation and policy investigation.

·         Identification of key future issues.

Problem Analysis

·         Financial situation in the Legal Aid Board was stabilised, but financial management capacity and systems are lacking.

·         Sound information technology was introduced and progress made in administration and financial management. Certain hard and software solutions need to be applied to complete the system in terms of judicare administration (purchase order system), case management at branch offices and justice centres (database and management information), human resources management systems (pay roll and optimisation of the VIP system), account management and enquiries and a Wide Area Network (WAN).

·         The judicare system still presents a number of risks, due to certain quality management issues and dormant files that are incomplete. The management model of judicare needs to be improved.

·         The organisational structure is not appropriate. The Legal Aid Board has moved way beyond what it was set up for decades ago- therefore making it very difficult for the organisation to fulfil its mandate.

·         Chronic lack of skills in certain key business areas. The Legal Aid Board has no human capital and skills development strategy. Training and human resources issues were not prioritised, due to the lack of a presence of organisational development and human resources capacity in the board.

·         No job profiles, performance management-linked to the management of deliverables (business plans, action plans etc) exist to manage performance, productivity and value for money. Lack of responsibility and accountability are key issues to be dealt with.

·         A culture of dependence exists - the over centralised management model has entrenched a culture of not taking responsibility nor accountability. A lack of decentralisation and delegation of powers and functions has resulted in inertia in parts of the organisation.

·         There are however, a number of very skilled, experienced and committed people who sacrifice greatly in order that the work gets done.

Broad Objectives

·         Stabilise finances.

·         Develop financial management capacity and systems.

·         Improve administration system.

·         Manage judicare system.

·         Restructure organisation to meet current challenges.

·         Develop appropriate skills to increase efficiency, effectiveness and value for money.

·         Develop human resources system.

·         Develop performance management system.

The above is a summary of the Business and Environmental Analysis that was undertaken in January and February 2001. This informed the next phase - Planning and Business Planning phase, and the management of implementation (see plans attached.)

Driving principles are Efficiency, Effectiveness and Value for money.

Finalised Issues

·         Planning process and business plans.

·         Implementation strategy.

·         Budget approved before start of financial year.

·         Audited financial statements for 1997-1998, 1998-1999, 1999-2000.

·         Annual Report for above completed and at print - to be released in May.

·         Management accounts being produced monthly. Accounts for March will be included in the Financial Statements to be completed by the end of May. The April management accounts will be produced by the 15.05.2001 and all other accounts will be produced by the 15^th of each month.

·         Policies and procedures manual.

·         Justice Centre and Branch manual.

·         Draft Information Technology plan. Implementation commences 01.06.2001.

·         Human resources plan completed. Implementation underway.

·         Audit coverage plans being implemented.

·         Risk assessment being revised. Finalisation 31.06.2001.

Planned and partly or not yet implemented:

·         Business process reengineering. (Restructuring of business processes)

·         Human Resources platform

·         Skills development

·         Job categories

·         Job profiles

·         Competency profiles

·         Employment equity

·         Performance management

·         Training

Some training has occurred in the audit function. Training on the PFMA and governance is underway for members of the audit team and management. Other training will commence in June after proper assessments of competencies and organisational needs are identified.

·         Information Technology plan implementation commencing in June.

·         Business management model for all centres and branches. Management and leadership development capacity to be developed.

Key Challenges

·         Addressing historical problem files so that the Legal Aid Board can focus on core business.

·         Capacity building in the organisation - human capital development.

·         Information technology and management systems integration that will allow the seamless functionality.

·         Management systems that enhance business integrity and accuracy.

·         Transformation of the regulatory framework - that will allow the organisation to come in line with changes in the rest of the public sector and allow for it to be restructured to operate efficiently.

·         Appeals could potentially cost the Legal Aid Board R1 404 x ± 100 000 people = R140m.

·         Access to Info Act =

·         Regional Court capacity - Public Defender in each court.

·         High Court for civil and criminal matters.

·         Overtime to deal with backlogs = R1m

·         Section 8 of Legal Aid Guide.

Risks

·         Change management.

·         Management and leadership development and succession plan for management.

·         Purchase order system change.

Conclusion

The restructuring process is fundamental, as management believes that the exercise will be futile if the basics are not put in place. The management of this process is challenging but these steps must be taken, if the ultimate objective is sustainability of the Legal Aid Board. Good progress has been made and the implementation of the Business Plan is on track.