Paradigm Shifts: Better by Design?

With ABS-day a-coming and the market already adapting to the freedoms given by a liberal approach to advertising and referral fees, there is a lot of talk about paradigm shifts. Richard Susskind’s been arguing for donkeys years that IT will transform legal services (in broad terms, he’s almost certainly right). And QualitySolicitors.com have been in the spotlight for innovative marketing (which looks to me rather like canny but conventional marketing garnering the power of first mover status). What has been a less strongly remarked on (though Richard S is one of those who has spotted it and I am not claiming any particular insight here) is that market-based innovation may/should/will lead to innovation in the process. That is underlying processes of (say) dispute resolution need to be rethought for real paradigm shifts to occur.

An interesting model is the ‘Centre for Justice‘. I know very little about them save for what I read on their Website. They say they are a not for profit independent organisation. They have a simple, unfussy, official sounding name and rely on a panel of assessors. The model appears to work on the basis that a claimant approaches them, they take an application fee, assess the case, approach the defendant, ask them to agree to binding arbitration of the dispute by the Centre (and mediation may take place). Claimants are given further estimates of cost (but not fixed fees). The basic terms are set out on their site.

The basic model is one of inquisitorial arbitration. In this, to me, a lot like a private Ombudsman. The assessors will liaise with the parties, investigate matters and adjudicate (if it cannot be mediated – which it looks to me is done through a separate process, but I may have misunderstood that). It’s a clever idea because it reduces two sets of costs (claimant and defendant lawyer costs) to one and allows the adjudicator more control over the process. Unsurprisingly they claim the process is considerably quicker and cheaper (you can see here for some of the more specific claims made on that score, though they are hedged as indicative).

I have no doubt that this sort of system will grow (whether CoJ have got the model right remains to be seen of course). There are already similar arrangements in defendant personal injury work where defendant firms work to ‘capture’ claimants who are then processed through an inquisitorial process. Claimant lawyers question the independence of these (understandably). My view is that a truly radical Jackson review would have considered some type of public or private Ombudsman scheme for most (possibly all) personal injury schemes. Having two parties scrapping over conflicting interests when a couple of thousand quid is at stake is difficult to justify in public policy terms.

So the CoJ model is a bit like claimant capture but without the obvious conflict of interest. There is also some important evidence in a study of the FSA that Ombudsmen schemes can work effectively to correct imbalances of power between two parties, whilst also working (possibly) on a more heuristic basis than rule oriented court-based adjudication. That is, the CoJ type model might be pretty effective in access to justice terms (as long as their costs are affordable – CoJ fees do not appear particularly low even if they may be cheaper and there is no presumptive cost shifting, so certain people would lose out of they used this scheme) if somewhat rougher justice (if we believe that complex, adversarial, rule-based approaches are genuinely better which I suspect is an assumption not many Common Law lawyers like to have challenged).

There are questions of course. There is a risk that repeat users will skew outcomes towards their interests (though the GIlad research above suggests this does not happen, some US work suggests it can). There may be real detriment in encouraging more private adjudication if one takes the view that law is a public good. We all take that view to a point, but it is difficult to hold to it when there is such strong pressure to settle/mediate in the current systems. One would need to be sure that entry into the system was voluntary not compelled (a problem raised by compulsory arbitration clauses already). Adversarial, client focused professional ethics are also challenged by this model but they are in any event by mediation; by certain fee arrangements; by the CPR; and by the solicitors code itself. One of the interesting side-shows of reform is going to be how the professional codes adapt to new systems whilst retaining ethical principles. Another question –perhaps of the profoundest importance – is by whom are such organisations regulated? Ain’t any reserved business going on here that I can see.

As with professional services generally, the ultimate question will be whether this is a fair and cost effective service. At the moment the terms of that debate are set by a provider’s advertising and a priori claims about particular models of justice. There is relatively little data on what works and what doesn’t. As we can see here innovation can involve incremental change: a bit of mediation, a bit of arbitration and a bit of Ombudsman-like inquisition and we have what looks a little bit like a paradigm shift that may escape the regulatory net. As innovations come so our need to understand them becomes stronger.