Expanding Horizons: Rethinking Access to Justice in Canada

Appendix B (continued)

Appendix B (continued)

More or Less? The Economic Perspective

Stephen T. Easton
Professor of Economics, Simon Fraser University
and Adjunct Scholar, the Fraser Institute

It is a truism that the citizenry should have access to justice. It is also a truism that wants and needs are unbounded. The important question is what constraints are to be put on the process of obtaining enough justice. Once the dust settles on the kinds of things we want people to be able to do in principle (and of course in law), the number accessing justice programs evolves into the question of who will pay – the taxpayer and the litigants/defendants, or just the taxpayer? And once it has been decided that the taxpayer rather than the affected parties will pay for litigation, then the only issue remaining is “how much?” both in aggregate and on a case by case basis since the budget will always be exhausted.

Consequently, my role as an economist is to suggest that even with new program spending (and especially were Justice to remain within the current envelope), the economic principle of tradeoffs among alternatives should be on the table nonetheless to evaluate the potential candidates for expansion.

We need this principle. A quick review of Canadian justice today emphasizes the pitfalls of doing without the basic notion of tradeoffs.

There are a number of interesting facts about Canadian justice.

First, the number of lawyers in Canada continues to rise. As of 1997 there are 67,961 lawyers on the rolls of Canadian law societies. Since 1991 this is an expansion of 21% in the number of lawyers even though the population grew less than 8%. From 1991-1997 the number of lawyers per 100,000 of population rose from 199 to 224. We have reached the ratio of lawyers to population that was found in the United States in 1981. To put this in local perspective, between 1993 and 1997 the number of physicians in Canada declined from 189 to 183 per 100,000 of population.

Second. With the declining crime rate, there are fewer criminal cases in the justice system. During the past decade, the actual number of criminal code infractions known to the police has fallen by 15% (as opposed to the crime rate that has fallen by 22%.)

Third. Civil litigation, about which remarkably little is known, has probably continued to grow after 1993 which was the last year for which systematic evidence has been gathered.[14] Over the previous decade civil litigation costs were increasing at a rate of (inflation adjusted) 2.3 percent per year. Governments (at all levels) were the most important contributors to increased civil litigation. It is unfortunate that more recent data do not exist. In the same way the crime rate increased and then began to fall in the early 1990s, it is important to know whether civil litigation continued to increase – something that I view as very likely – or actually declined in concert with the criminal caseload. [15]

The Recent Past. The past fifteen years have provided an object lesson for the expansion of legal services by governments. On the one hand there is the fiasco of legal aid where the great expansion of the 1980s and early 1990 was suddenly replaced by an equally sharp contraction. It is not credible that booms and busts in legal services are being made in any rational way with such gyrations in both funding and service. On the other hand, we have the operation of much of the rest of the justice service system that has been remarkably stable in the face of both rising and falling demands for service.

Table 1 reports total spending on different categories of justice services in real 1999 dollars (to adjust for inflation).

Table 1

The Cost of Justice Services: 1988-97 (millions of 1999 $)
Year Police Courts Legal Aid Adult Corrections Youth Corrections
1988/89 5621 820 384 1893 456
1989 5717 na 416 2018 486
1990 6110 892 480 2086 505
1991 5983 na 567 2064 519
1992 6209 942 654 2042 531
1993 6177 909 634 2005 542
1994 6158 889 688 2017 560
1995 6054 883 648 2000 529
1996 6005 879 550 2019 526
1997 6045 na 459 2096 504

Source: CCJS Juristat 17(3), p.9; and Juristat 19 (12), p.4.
*Peak years in bold.

What is particularly interesting is that movement in total real expenditures on the police, the courts and corrections are relatively gradual while legal aid costs are comparatively variable.[16]

Expanding Service. This leads to the question: What kind of budgeting exercise is reasonable in the face of a desired expansion of service? It is easy to spend money. There is no lack of applicants with unmet needs if a government is willing to pay the freight – a look at the history of legal aid proves that. But can services be expanded in a way that is both meaningful to the recipients and to the taxpayer? I think that the answer is “Yes,” but it requires going well beyond Table 1’s statement of spending.

For example, a basic criterion is that when more money is to be put into a program, the benefit from the service level increase should be commensurate with the increase in funding.

This means that there has to be a notion about what constitutes the service level. In the case of the police, we might imagine that it has something to do with the number of crimes. In the case of corrections, it has something to do with how many people are sentenced to incarceration for crimes they have committed. In the case of legal aid, it has something to do with how many people are serviced in criminal (and civil) cases. To be sure, these are relatively crude measures. After all, we want the police to catch criminals and deter crime; we want courts to process people justly as well as efficiently; and we want prisons both to incarcerate and to discourage recidivism.

Regardless of what criteria we choose for expansion, we need to be assured that the benefit from an additional dollar spent on legal aid, for example, should be as beneficial as the additional dollar that could go to the courts, the police or corrections.[17] Otherwise it would be more sensible to increase the dollars flowing to the courts, the police and corrections before increasing the flow to legal aid. At current service levels, if there is a specific program that provides demonstrably higher benefit, then expand that service.

To operationalize this principle, we need to be able to characterize service cost. Table 2 illustrates one such characterization: the dollar cost of each service is deflated by the number of crimes known to the police.[18]

For many, but not all, of justice's functions, the number of crimes known to the police is a basic source of demand.

Table 2

The Cost of Justice Services per Prime Known to the Police
Measured in Constant (1999) Dollars
Year Police Courts Adult Corrections Youth Corrections
1988/89 2352 343 792 191
1989 2357 na 832 200
1990 2326 339 794 192
1991 2064 na 712 179
1992 2180 331 717 186
1993 2258 332 733 198
1994 2327 336 762 212
1995 2294 334 758 201
1996 2271 332 763 199
1997 2389 na 828 199

As Table 2 describes, the costs of justice relative to the number of crimes known to the police have been remarkably constant over the past decade. That is, the fluctuations in cost per unit service are neither systematic nor follow obvious trends. Relative to the number of crimes, the costs of Canadian justice have been stable relative to the "demand" for service.

As it is the only cost that is actually at a maximum in 1997, Table 3 reports data about corrections for the past two decades: the number of criminals in custody at federal and provincial facilities over the past twenty years relative to the number of criminal code violations.

Table 3

Inmates per 1000 Criminal Code Violations
Year Inmates
1978 12.8
1979 11.8
1980 11.0
1981 11.1
1982 12.2
1983 12.6
1984 12.9
1985 12.6
1986 11.8
1987 11.2
1988 11.5
1989 12.0
1990 11.1
1991 10.6
1992 11.1
1993 12.0
1994 12.7
1995 12.8
1996 12.9
1997 13.0

There has been very little change in the proportion of those incarcerated relative to the number of criminal code violations. So what does this mean?

These data indicate that there is a stable association between these categories of expenditure and the underlying source of the demand for service that, in this simplified exercise, is taken to be “known criminal code violations”. The costs and service levels in our justice system are, by and large, stable. There are not great and sudden changes in costs relative to a basic measure of service.

There is no such stability, however, between crimes and legal aid, and although not presented here this is true even for criminal legal aid. Table 4 displays the cost of legal aid per known crime.

Table 4

Legal Aid per Crime Known to the Police

(1999 Dollars)
Year Legal Aid
1988 161
1989 172
1990 183
1991 195
1992 230
1993 232
1994 260
1995 246
1996 208
1997 181

In contrast to the stable patterns of expenditures in the other categories of justice spending in Canada, legal aid spending per crime has been highly variable. If there is additional spending to be done in this division of Justice, then some rationalization of service levels is desirable. To justify expanding service, a case has to be made that a dollar spent here is worth more than a dollar spent in the other components of justice. It would be very difficult to rationalize expanding a service that has been so variable unless it can be shown that a dollar spent on this form of justice yields a better outcome than an additional dollar spent among policing, corrections and the courts.

So what is the framework? To expand service in any one sector of spending, prove that the present cost per unit of service benefit in that sector is lower than the costs of expanding service in all of the other sectors. Legal aid aside, it is likely that with an extra dollar to spend, you would tend to distribute it across all the activities that have provided stable levels of service in the past rather than choosing one (winner) to expand. This prescription is bland, but it is the correct one if you are duly diligent. With legal aid, the case must be made that by expanding service you are improving access to justice better than by improving the courts, the police and corrections.

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