Apr 10 2012

This post is the fourth in a series of six. In the coming time, you can find weekly blogposts that will present the highlight from the Trend Report: Towards Basic Justice Care for Everyone. Each of these posts will introduce a topic that will be discussed during the Innovating Justice Forum on April 16-17 in The Hague.

BBC’s Louis Theroux made a documentary that shows how the market provides for strong-arm services if the state fails to do this. And that people are very much willing to buy these services on the market (see: Law and disorder in Johannesburg). The documentary is as compelling as clear in showing how there is a clear structure that allows buyers and sellers to exchange law and order services, i.e. there is a market. The documentary also makes it very clear that leaving some things to the market can go wrong.

Using “market lingo” when it comes to justice is sure to annoy or even antagonize some people. But still, basic justice can perhaps also be seen as a matter of transactions concerning concrete services and information on the one hand (Martin Gramatikov discussed some examples of these in his recent post) and a fee, recognition or something else on the other.

The more interesting question might be whether the market perspective on justice is useful. It can perhaps help to answer the question how it is possible that if there are clear justice needs (for incentives to cooperate, negotiation support, information about fair solutions, etc.) and a clear demand, there is no sufficient supply. What makes it difficult for lawyers, judges and other people motivated to provide access to justice to provide the services needed for this?

What if we put on our economists’ specs and have a quick glance at an important pillar of any justice system: why is it so difficult to deliver legal services that are affordable and meet the needs of clients? We see enormous barriers to entry of the market for these services. In many countries, only qualified lawyers are allowed to offer legal advice or legal assistance in court procedures. And the market for legal services is heavily regulated; arguably the most heavily regulated one of all professional services. This is one way of dealing with the information asymmetry between clients and lawyers: in order to protect clients who lack the knowledge to be able to decide whether a lawyer delivers services of sufficient quality, lawyers need to be regulated.

But such heavy regulation can also be a barrier to innovation. For example, practice shows how great successes are achieved with paralegals providing legal services and information. See the Facilitadores Judiciales program of the OAS, TIMAP for Justice in Sierra Leone, or the work processes of many legal insurers. These all work with paralegals that have basic legal knowledge and often good interpersonal skills and with a judge or an advocate supporting these paralegals. Innovations like these can help dramatically reducing the costs for legal services. Innovations can also extend the reach of services whenever there simply are not enough educated lawyers.

Basic economic theory states that when the same – or an even better – service is offered against a lower price, this service is destined to be more competitive and attract more clients. Normally, we would expect this to happen in the market for legal services as well. But the heavy regulation intended to protect people may also prevent them from getting access to these services.

Obviously, this is a very superficial discussion of one element of market for justice. But it shows how the market perspective can help to get insightful alternative answers to questions. And that it might be a good idea to think of alternative ways to safeguard quality of legal services than heavily regulate them.

Chapter 4 of the Trend Report discusses several other answers to the question why it is so hard to deliver justice. It discusses the submission problem (selling one service to two clients with opposing interests is a tough job), the insufficient incentives on courts (giving them no reason to innovate), the difficulty with legal information tailored to the needs of people (high production costs, difficult to make money with) and the mixture of private and public benefits of adjudication (the shadow effects of courts). Sometimes, different perspectives like the market perspective are taken to explore what alternative answers can be found. So justice can be innovated but still be justice.