The Financing Litigation Legal Research Project: Alternative Methods of Improving Access to Justice

The Financing Litigation Legal Research Project: Alternative Methods of Improving Access to Justice

February 8, 2018

BY Valerie Le Blanc

BCLI’s Study Paper on Financing Litigation reviews six financing models that emerged both in Canada and internationally for how people pay for litigation. It also identifies 18 opportunities and ideas to consider for structural, systemic or legal change to enhance the use of each financing option in British Columbia.

Throughout the consultation phase of the Financing Litigation Legal Research Project, several ideas were raised to consider other ways to improve access to justice that fell outside the scope of the project. Chapter 12 of the study paper outlines five alternative ideas to improve access to justice, namely:

1. Increased use of alternative dispute resolution processes;
2. Expansion of legal aid;
3. Promotion of cy-près orders;
4. Community Contribution Companies; and
5. New business models.

While the chapter does not include a full analysis of how each idea works, or could work, it does offer an an overview to give the reader some food-for-thought over what other opportunities may exist to continue examining how people pay for litigation.

Highlights from the Study Paper on Alternative Methods of Improving Access to Justice

Ideas to consider

1. Increased use of alternative dispute resolution processes
   1. Alternative dispute resolution—use of mediation services for parties who qualify for legal aid in divorce proceedings can help promote better case outcomes;
   2. Civil Resolution Tribunal—cost-effective, user-centered process to resolve strata and small claims disputes. Encourages use of facilitation or negotiation services to reach agreement; and
   3. Quebec PARLe—online dispute resolution initiative to resolve consumer disputes.
2. Expansion of legal aid
   1. Legal services tax—direct revenue collected from the tax on legal services to legal aid; and
   2. Use of property liens under the BC Legal Services Society Act.
3. Promotion of cy-près orders
   1. Incorporate terms in pro bono retainer agreements to allow clients to assign part of a cost award back to the advocacy group to increase its revenue stream.
4. Community Contribution Companies (C3s)
   1. Structure law firms as C3s to include social goals as part of its overall mandate; and
   2. Donations from subsidiary C3 law firms to free legal clinics.
5. New business models
   1. Use of unbundled legal services for development of new business model.

Some Recent Developments on Alternative Methods of Improving Access to Justice (since June 2017)

• West Coast LEAF published a list of recommendations to reform BC’s justice system in its report, Justice Reform for BC, released in Fall 2017. Working in collaboration with BC Civil Liberties Association, Pivot Legal Society, and Community Legal Assistance Society, the report lists 10 recommendations that include Indigenous rights and implementation of the Truth and Reconciliation Commission recommendations, reform of BC’s corrections system, review of legislative provisions governing detention of persons with mental disabilities, among other issues. Included in the list of recommendations is the elimination of the Legal Services Tax for low to middle-income earners, with proceeds directed to delivering legal aid services.
• Canadian Lawyer Magazine published an article on October 2, 2017 on BC’s Civil Resolution Tribunal (CRT). The article provides a history on the development of the CRT, and notes the popularity of its model in assisting other jurisdictions, both within and outside Canada, to develop a similar dispute resolution structure. Shannon Salter, CRT’s Chair, notes the benefits to CRT’s online platform include the ability for litigants to use CRT services “outside of traditional court hours”, saving them considerable costs for child care and time off work, which suggests “that there’s a strong demand to engage with justice services where and when it’s convenient for them.” The article includes commentary from a private practice lawyer who advises strata corporations who receive CRT claims, and also includes discussion of how the CRT might continue to develop in the future. To view the article, visit the website here.
• Canadian Lawyer Magazine published an article on November 14, 2017 on the Law Society of Alberta’s review of alternative business structures for delivery of legal services. Rob Armstrong, elected Bencher of the Law Society, notes that organizations like the University of Calgary Faculty of Law’s family law project currently operate under this model. Law school graduates complete both their articling and first year of practice in the project by providing legal services to clients who cannot afford legal assistance or are self-represented. Armstrong notes due to the high number of non-lawyers in the program, it is not currently regulated by the Law Society. The article notes the Law Society is consulting with lawyers about how it might adapt its regulatory scheme to allow for oversight of alternative business structures like this one. To view the article, visit the website here.
• Michigan Law Revision Commission (MLRC) released its 47^th Annual Report 2015-2016 (n.d). The report summarizes the MLRC’s work over the two calendar years, and topics of current study. One topic under review is a New Cyber Business Court. The memorandum contained in the report “proposes the creation of an online business court: one that would handle large business and commercial claims completely online, rendering dispositive, appealable decisions through online procedures.” The MLRC’s memo reviews existing online dispute resolution models, including Michigan’s own cyber and business courts and private, international and academic models. The memo also examines “the core values and practical considerations in creating an online business court”, namely efficiency, expertise, legitimacy, finality, and fairness. The memo concludes with recommendations for the structure of a New Cyber Business Court. To view the full memo, visit the MLRC website here.

About the Financing Litigation Legal Research Project

The Study Paper on Financing Litigation (PDF) examines the traditional and alternative methods litigants use to pay for litigation. The cost of litigation is a significant barrier to accessing the justice system. While some disputes can be resolved outside the courtroom, litigation is often the only means to achieve an equitable result. However, a litigant’s ability to pay for the legal fees and expenses that come with litigation may become a concern before, or during, the process. Taking a legal dispute to trial is expensive. Many litigants lack the financial resources to take on the risk of an unsuccessful case.

The study paper reviews six financing models that have emerged both in Canada and internationally:

• Unbundled legal services;
• Third-party litigation funding;
• Alternative fee arrangements;
• Crowdfunding;
• Legal expense insurance; and
• Publicly funded litigation funds.

The study paper also identifies 18 opportunities and ideas to consider for structural, systemic or legal change to enhance the use of each financing option in British Columbia. It concludes with a chapter that briefly discusses five alternative ideas that could mitigate the rising cost of legal services and improve access to justice generally.

This project was made possible by funding from the Law Foundation of British Columbia.

Useful Links

• Study Paper on Financing Litigation (PDF)
• Highlights from Chapter 12—Alternative Methods of Improving Access to Justice (PDF)
• List of Resources—Alternative Methods of Improving Access to Justice (PDF)
• The Financing Litigation Blog Series