Rethinking the Welfare State: The prospects for ... - e-Library

Legal aid 89
jail. Additionally, by pleading out, the case is disposed of more quickly, thereby reducing
the amount of resources used. 67 However, it should be pointed out that the merits of this
pattern only hold true if the client is, in fact, guilty. The NCW recognizes this in stating
that, “overworked legal aid staff lawyers may be tempted to pressure their clients into
pleading guilty when they have a valid defence to avoid the time and trouble of going to
trial.” 68 The real problem is that there is no way for anyone to know whether or not a
particular defendant has a valid defense and whether or not he or she is guilty. Therefore,
it is virtually impossible to determine whether or not staff lawyers are acting efficiently
or negligently.
Although this is also the case in the context of evaluating private lawyers, it is argued
that the concerns are more pronounced when staff lawyers are involved. The future
income of a staff lawyer is not contingent to the same degree as that of a private lawyer
on the satisfaction of the client. Legal aid clients, under a staff model, have no choice but
to seek assistance at a staff office. Staff lawyers are subsequently assigned to particular
cases. Even if a staff lawyer has a reputation for losing cases, unless she is fired, she will
continue to be assigned to clients and will continue to receive the same salary. Private
lawyers, on the other hand, are not assigned to clients. They depend on the clients to
come to them, and therefore have greater incentives to provide a satisfactory service in
order to preserve their reputations.
The South Australian Legal Services Commission has also reported finding that staff
lawyers are less expensive than private practitioners. 69 However, the results of this study
have also been criticized for failing to take into account the differences in the type of
cases that were handled by staff and private lawyers. It has been suggested that, “the files
that were retained in-house were of a routine and repetitive nature whereas the more
complex matters were referred out.” 70
The use of staff lawyers does not alleviate the principal-agent problem mentioned
earlier; it simply changes the nature of the agency relationship. Stephen points out,
“Performance-related pay or promotion related to performance against objectives are
ways of encouraging an employee’s efforts to be directed toward the employer’s
objectives.” 71 Thus, the agent (the staff lawyer) will have incentives to direct their efforts
towards measurable components of performance, such as the number of cases dealt with
in a particular time frame. This may, however, induce lawyers to under-supply their
services to each client in order to process a higher number of clients. Stephen concludes
that, “this results in the public defender responding to incentives in much the same way
as a financially motivated independent supplier who is paid a fixed fee by a third party
payer.” 72 Therefore, both types of schemes have perverse incentives embedded within
them.
Legal expenses insurance
One alternative to judicare which is growing in popularity in a number of jurisdictions
(notably in Scandinavia, Germany and the Netherlands) is mandatory private legal
expenses insurance (LEI). Under such schemes, individual citizens are required to
subscribe to an insurance plan which provides coverage of legal fees in the event of
litigation or prosecution. One can envision a program under which the state either insures
citizens itself, or issues a voucher for the purchase of an LEI plan. This model constitutes