Economists want greater productivity from lawyers

Unbundling lawyers from the law ... Wider disciplinary powers ... Contingency fees ... ASIC to regulate litigation funders ... Legal aid redesigned on a demographic needs basis ... More technology ... Kate Lilly extracts the essence from the Productivity Commission's draft access to justice report 

The Productivity Commission examines the machinery of the law

The draft report from the Productivity Commission on Access to Justice Arrangements takes a sweeping look at the legal services landscape and makes numerous suggestions to improve access to the law, a lot of which are quite familiar. 

The difference this time is that the investigation is in the hands of two economists, Warren Mundy and Angela MacRae.  

The Productivity Commission was hampered by a lack of data about the provisions of legal services. 

Warren Mundy said: 

"The commission has approached this inquiry by weighing up the potential of a range of possible responses to these problems to improve community wellbeing and the costs that would be associated with such responses." 

Mundy and MacRae found opportunities for improvement in relation to: 

• the accessibility of the justice system; 
• the operations of ombudsmen, tribunals and courts; the use of the alternative forms of dispute resolution; 
• the regulation of the profession; 
• private funding of litigation; and 
• the provision of legal aid.

The draft report is a doorstopper at over 800 pages. We've picked the eyes out of the key points:

Consumers lack knowledge about whether to take action and find it difficult to shop around for legal assistance 

• The commission recommends that all state and territories develop a single contact point for legal assistance, with NSW's LawAccess as a working template. Such a service would provide telephone and web-based legal information, as well as advice in basic matters. 

• All efforts should be made to develop plain language forms and guides. 

• An online resource that would publish a range of typical legal fees. 

• Legal services should be "unbundled" so that clients can opt for a mix of work provided by lawyers and para-legals. There should be a single set of rules governing the provision of unbundles services. 

• All states and territories should allow disciplinary action against legal practitioners in consumer matters that do not involve a breach of professional conduct.  

The formal legal system is too adversarial - greater emphasis should be placed on early, informal solutions 

• Because the system is adversarial, there is little incentive for parties to co-operate or facilitate the early transfer of information. 

• Tribunals should more rigorously apply restrictions on legal representation. 

• In a recent survey, around 17 percent of the population reported their legal needs were unmet in relation to a substantial civil dispute. The commission says that better use of informal resolution avenues, such as government and industry-specific ombudsmen, could reduce that number to five percent.

• Governments and industry should raise the profile of ombudsmen services, where 97 per cent of disputes are resolved within two months.  

• Australian law schools should incorporate non-adversarial and non-court dispute resolution into the core-curricula, in order to build a more responsive legal profession. The commission also suggests tertiary institutions should look to develop courses for students from non-legal disciplines, on how legal disputes can best be resolved.

• The commission recommends that Commonwealth, state and territory governments should be subject to model litigant requirements. A formal body should enforce these guidelines. The commission is inviting views as to whether such requirements should apply in matters involving local governments and in cases where one party is better resourced than the other.  

• Court fees in Australia are low compared to the UK and inconsistent across the board. The commission recommends court fees should be increased significantly, in order to encourage well-resourced litigants to pursue other avenues of resolution.  

Ideas about costs 

• The ban on damages-based billing (as an alternative to billing on a conditional basis) should be removed. This would better align lawyers' and clients' interest and remove the incentive to over-service. 

• Litigation funders should be regulated as licensed financial services providers, monitored by ASIC and the courts. 

• Cost awards by courts should take into account whether a dispute could have been resolved prior to litigation. 

• Lower courts should award costs based on fixed scales. Higher courts should introduce processes for cost management and capping. 

• Courts should grant protective costs orders to parties involved in matters against governments. Governments should also establish a public interest litigation fund to pay the costs of public interest litigants. 

Some suggestions worth thinking about

Unsurprisingly, disadvantaged Australians face barriers to justice 

• Self-represented litigants require greater support than they currently receive. The commissions says guidelines should be developed for the benefit of judges, court staff and lawyers on how to best assist these litigants in courts and tribunals.

• The commission has invited comment on whether certain concession-card holders should be automatically exempted from court fees.

• The Community Legal Services Program should be reformed in order to be responsive to demographic change. Grants of legal assistance should consider the client's circumstances and the impact of the legal dispute on their broader community. 

• The Commonwealth government should allocate funding for Aboriginal and Torres Strait Islander legal services and family violence prevention services, according to geographic need and service costs.

• There should be a cost-benefit analysis to aid the development of culturally appropriate dispute resolution program for Aboriginal and Torres Strait Islanders.  Commonwealth and state and territory governments should implement a nationwide framework for the provision of Aboriginal and Torres Strait Islander interpreters.

The commission is receiving submissions on the draft report up to May 21. Public hearings are slated for the capital cities in June.  

The draft report can be found here 

There's an overview here

Table: Three major dispute resolution mechanisms - an overview 

Table: The four government funded legal assistance providers