Reform but not change

Being in Favour of Reform, Just Not Change

To a hammer, everything is a nail

There is an old aphorism that “To a hammer, everything is a nail”. The aphorism reflects the centrality of perspective. Where you stand very much affects what you can (or want to) see.

I think that Professor Julie Macfarlane makes this point in the context of discussions about access to justice. Professor Macfarlane has carefully researched and thoughtfully written about the reality that most family law litigants don’t use lawyers. She speaks about this issue with lawyers yet, as she seems to say, the discussions with lawyers about this topic are, at best, stilted. I suspect that this is because lawyers see the access to justice issue from their professional perspective, are rightly proud of the work that they do for clients and have difficulty processing the access to justice issue from any perspective other than their own.

So the main point of this column is to try to address the A2J question from a different perspective and to use that perspective to look at the solutions offered.

Middle Income Access to Justice

In 2012, Professors Trebilcock, Duggan and Sossin published Middle Income Access to Justice. The book drew on 23 surveys of the public’s experience with justiciable problems undertaken across 13 countries.

The importance of this approach is that it looks at justiciable problems experienced by the public rather than looking at what lawyers do. The punch line is that there is a difference. Lawyers know what lawyers do. Lawyers fairly believe that lawyers do good things. So lawyers don’t see problems. To a hammer, everything is a nail.

The 2009 Ontario Civil Legal Needs Project is examined in the book by Professors Baxter, Trebilcock and Yoon. They examine the data seeking to determine what predicts the decision to seek legal advice. In other words, when do the members of the public go to lawyers for help? The answer is that it is the problem type significantly predicts whether a lawyer is consulted. And there are four problem types that predict the involvement of lawyers namely criminal, family, wills and powers of attorney and real estate. While not significant in a statistical sense, personal injury comes a close fifth on the numbers.

That the public goes to lawyers for criminal, family, wills and powers of attorney, real estate problems and personal injury problems should come as no surprise to lawyers. This is pretty much exactly what lawyers say that they do for individuals. In 2005, the Law Society of Upper Canada Sole Practitioner and Small Firm Task Force reported that lawyers in sole practice and in small firms generally represent individuals (77%) and that these lawyers practice real estate (46%), civil litigation (39%), wills, estates, trusts (35%), corporate and commercial (33%) and family (26%).

What do lawyers do? What legal needs exist?

Given that the public says that it uses lawyers for criminal, family, wills and powers of attorney, real estate problems and personal injury problems and that this is what lawyers say they do, we can have a strong degree of confidence about the nature of the practice of law for individuals.

Solicitors do real estate work, assist with wills, estates and trusts and also do some corporate and commercial work (presumably for small businesses). Litigators do criminal, family and personal injury litigation. Some lawyers of course do solicitors work as well as litigation.

That these are the categories of work done by lawyers makes obvious sense. Members of the public with significant assets use solicitors to help them with real estate transactions and in dealing with inheritances made or received. Members of the public who have trouble with the criminal law, who are in failed family relationships or who seek compensation for significant personal injury use litigators.

But what lawyers don’t see and cannot appreciate is that this amounts to a relatively small portion of the justiciable problems experienced by members of the public. According to the 2009 Ontario Civil Legal Needs Project, the public only seek legal assistance in respect of 11.7% of justiciable events.

Said simply, the public use lawyers for less than 15% of the justiciable events experienced by them. Said another way, what is 100% of lawyers’ practices is less than 15% of the public’s legal needs.

What about the other 85%?

Of the over 85% of justiciable problems that don’t attract legal attention, approximately 60% are consumer problems, money/debt and employment problems. A smallish proportion is in respect of discrimination, housing, hospital treatment/release, welfare benefits, disability benefits, immigration and other matters.

Should we care about the 85% of legal needs that are not addressed by lawyers? For the legal philosopher, the answer must be yes. As Professors Trebilcock, Duggan and Sossin put it “Most conceptions of the rule of law assume equality before the law and hence access to law or the justice system as one of its fundamental predicates”. And as Professor Gillian Hadfield argues, it seems quite wrong that the businesses on the other side of these justiciable events have expert legal assistance while the public does not. For the Law Society, the answer must also be yes given its public interest mandate. For individual solicitors and litigators who are struggling to do a good job and make a decent living, it is not surprising that this 85% is not on their radar.

The next question is why are lawyers used for less than 15% of legal needs? This is not well examined but I think the reason is clear. Lawyers are small business people who sell their time and expertise to help members of the public solve their problems. Taking into account the incomes reasonably required by university-trained highly intelligent professionals and their overheads, the fees for lawyers solving problems are measured in the hundreds of dollars per hour of time spent.

Real estate transactions and issues with inheritances are economically significant enough that the cost of a lawyer is justified. Personal injury claims work economically where the compensation likely attainable is large enough to justify legal fees.

Criminal law and family law are more problematic. Criminal law problems undoubtedly require legal assistance but accused persons often cannot afford the fees. As a society, we (mostly) address the importance of criminal law problems and the inability of those with criminal law problems to pay for legal assistance through legal aid.

Family law is the problem child from the lawyers perspective. The issues are difficult enough to justify legal assistance. People often cannot simply choose to ignore the family law issues whether because custody of children is at issue, support is needed or assets are being divided. Most people don’t use lawyers for family law problems. Not because they don’t want to but rather because they can’t afford to pay what turns out to be a large and unpredictable cost.

As for the remaining 85%, the fees of the legal expert are out of proportion with the size of the problem to be solved and, unlike criminal or family law, the public isn’t forced into the legal system.

What to do about the 85%?

So what to do? We could ignore the 85% and hope that no one notices. This seems to be the current approach.

We could hope that society comes to see these legal needs as being as compelling as health or education and provide legal aid funding. There are two problems with this approach. First, it won’t happen. Second and more important is that it is wrong to require society to pay for solutions the cost of which is disproportionate to the problem addressed. Even people with sufficient resources generally do not use lawyers for these problems because of the cost benefit equation. The business model of the small business lawyer does not provide an efficient way to address the 85% whether privately funded or funded by legal aid.

We could (and in Ontario have) allow regulated paralegals to address a portion of the 85%. While the business model is essentially the same, paralegals charge less and so can efficiently address some of the 85%. Small claims court work is a good example. But the advocacy provided by regulated paralegals solves at best a small part of the 85% puzzle.

There are two remaining choices. Neither will be attractive to practising lawyers. The first is to end the monopoly. If lawyers and regulated paralegals can’t efficiently address over 85% of legal problems then it makes sense simply to get out of the way. It makes no sense to prohibit anyone but a member of the Law Society from doing work that members of the Law Society don’t do.

The alternative choice is to encourage innovation by regulatory liberalization permitting other ways of delivering legal services. Having small businesses spend expert professional time on problems is not the only way to address problems. Technology and business processes can provide lower cost solutions. Larger businesses with scope and scale can deliver services in a way that the small business professional cannot.

My preference is to allow new ways of providing legal services under regulatory supervision. I am uncomfortable with the deregulation alternative. But I don’t see how doing nothing is acceptable.

Returning to the 15% (actually the 11.7%)

Criminal, family, wills and powers of attorney, real estate and personal injury problems make up the 11.7% of justiciable problems for which the public turn to lawyers for assistance. These are problems that lawyers see and seek to solve for their clients.

For criminal law, there is a clear issue of access to justice. But the answer is mostly, if not entirely, proper legal aid to ensure that competent criminal lawyers are engaged to protect fundamental constitution rights.

For real estate transactions, there is no reason to think that access to legal services is an issue. While there are likely efficiencies available through new ways of providing legal services, the issues in real estate law aren’t really about access.

For wills and powers of attorney, the issue is a bit more complicated. For those with property of sufficient value, the current system no doubt works reasonably well in terms of access. As in real estate, services could likely be more efficiently. But, it is also clear that the majority of Canadians do not have a will nor a power of attorney. For the majority of Canadians, wills and powers of attorney are in the 85% not the 15%. But lawyers do not see this as an issue because lawyers ably serve the minority of the public who have sufficient assets in their estate or a sufficient inheritance to justify paying lawyers’ fees.

For personal injury law, the contingent fee substantially addresses the access issue. However, the small business professional model limits the risk that can be taken by personal injury lawyers. With limited capital and limited volume, personal injury lawyers inevitably will tend to take on claims that are most certain to pay off. And it is common that clients are required to fund disbursements which may or may not be affordable.

The greatest access problem in the 15% is in family law. Family law litigants often start off with a lawyer but then try to represent themselves because legal fees are large and unpredictable and the amount of the family assets do not justify the legal fees. Professor Macfarlane’s research indicates that 70% of family law litigants are unrepresented. It seems that many start in the 15% but most end up in the 85%. Family law lawyers do not have the volume of business or the working capital to work on a fixed or predictable fee basis. The hourly rate legal model is unable to reduce price without reducing lawyers incomes. Technology and process innovation are not brought to bear because of lack of investment capital and expertise.

Improving access to justice in family law is complicated. Part of the answer may be allowing paralegals to do some of the advocacy work that is no longer being done by lawyers. Part of the answer may be in reducing the complexity of the process by which family law disputes are resolved. But there is reason to think that allowing evolution of business structures can be part of the solution as well. In Australia, firms which have taken advantage of access to external capital are now providing fixed fee family law services. As well, the well-capitalized Australian firms (e.g. Shine Lawyers, Slater & Gordon) fund disbursements in personal injury matters as well as fees.

To return to the beginning, it seems that it can be difficult for lawyers to appreciate the access issues that exist in our legal system. This may be because our perspective is inherently limited and we are rightly proud of that which we do. There is also a natural fear of change and, for some, a tendency to exaggerate how well things are going and how badly things could be if the status quo is not maintained. In my view, there is a compelling need for reform to advance access to justice. The scholarly thinking (e.g. Hadfield, Semple) and the actual evidence shows benefit, not harm, from allowing new ways of providing legal services. We actually need to change.

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