Immigration and Refugee Legal Aid Cost Drivers

Executive Summary

This study identifies factors that drive immigration and refugee expenditures and outlines how these factors influence the cost to governments to provide these services. The study focuses upon legal aid for refugee claimants because the vast majority of cases, by volume and expenditure, fall into this category.

In his research, the author reviewed an extensive array of government reports, documents, and academic papers. He has also conducted targeted interviews and correspondence with key informants from provincial legal aid authorities and from the Immigration and Refugee Board (IRB). His analysis of this material was augmented by his years of personal observation and experience in refugee claims processing [1].

Background

The most obvious legal aid cost driver is the level of demand for legal representation by people who cannot afford to retain counsel on their own account. Virtually, all refugee cases fall into this domain. Thus, there is a strong correlation between refugee claim volume and levels of coverage on the one hand and legal aid program costs on the other.

Legislative, procedural and jurisprudential developments all have the potential either to increase or to reduce legal aid costs. Where these changes simplify processes or clarify uncertainties in the law, they serve to reduce costs. On the other hand, when the changes create new uncertainty or impose new procedural requirements, they tend to increase the cost of legal representation.

Other factors, such as differences in tariff structures and modes for delivering legal aid services, and the nature of the proceedings involving immigrants and refugee claimants for which legal aid is required, also have an impact on legal aid costs, but to a lesser extent than does the sheer number of refugee claims.

Models For Service Delivery

Legal aid programs in Canada differ widely in the ways they provide legal aid services, and in the portion of such services that are delivered by salaried staff lawyers and by lawyers in private practice. Salary rates and the tariff rates for different services also vary widely among the different legal aid plans. The evidence, on balance, indicates that it generally costs less to deliver legal aid services through salaried lawyers than through lawyers who work on a fee for service basis.

In the area of immigration and refugee legal aid, evidence on the relative cost effectiveness of the two models is mixed. From published studies it is also difficult to determine which type of delivery method provides the highest quality legal representation. Both systems have advantages and disadvantages.

The main risks that have been identified with respect to staff-based legal aid programs are limitations on a client's right to choose counsel, low productivity, and concern that quality can be compromised due to structural pressures. There is also concern that administrative overhead tends to increase in staff offices that are not subject to competitive market forces, and that legal aid programs become more vulnerable to a withdrawal of services if staff have a monopoly over service delivery.

Supplier Induced Demand

In economic theory, when a person (called a "principal") relies on someone else (called an "agent") to deliver a service, there is a risk that the agent may provide less than the principal expects for a given price, or charge more than the principal intended to pay for the service provided. Economists describe this difference in the value of what the service is worth to the principal and the amount paid to the agent as an "agency cost". The difference arises because the principal and agent do not share the same information or objectives regarding what the principal expects.

Lawyers have an incentive to provide quality legal representation, but they also have an incentive to maximize their incomes. Clients rely almost completely on lawyers to identify what service is appropriate, and there is wide latitude as to what is the most appropriate course of action in many cases. In these circumstances, there is a possibility, that lawyers, when choosing between relatively equivalent options, will favour options that maximize their income over options that minimize cost to clients. This specific type of agency cost is called "supplier induced demand".

Supplier induced demand is often presented as the most significant limitation of the judicare model of service delivery. When tariffs have caps, there is an incentive for lawyers to maximize income by increasing the number of cases they handle and to work no more than the number of hours allowed on any individual case. To the extent that lawyers are expected to work beyond the cap without being paid, decline in the quality of service becomes a concern.

Evidence of the extent to which immigration and refugee legal aid arrangements under different tariffs are subject to supplier induced demand is limited. The prescribed time limits for services relating to immigration and refugee matters are so low that there is very limited opportunity for lawyers to maximize incomes by doing additional work. However, available evidence indicates that the average length of refugee hearings has been longer in Ontario and British Columbia, which pay for actual time spent in hearings, than in Quebec, which pays a fixed fee for each case. Also, utilization of the expedited process, in which manifestly well-founded claims can be determined without a hearing, has been lower in Ontario and British Columbia than in Quebec.

Alternative Options For Procuring Legal Services

Block contracting is an alternative to paying private practice lawyers for each individual case according to an established tariff. Legal aid authorities can have law firms bid competitively for blocks of cases or they can contract with firms to handle a specified number of cases of a particular type at an agreed total cost.

Block contracting of immigration and refugee cases does appear to offer some scope for improved efficiency in case management. To the extent that block contracts might enable counsel to concentrate on similar cases, and thereby to realize greater efficiencies in case preparation, they may also serve to reduce the overall cost of providing representation services. However, concerns about the possible erosion of quality of service and limitation of clients' choice of representation need to be addressed.

Another variant on the judicare model is franchising - where a limited number of lawyers or firms are granted a license to do legal aid work in a particular market. This system can have significant advantages in markets where legal aid work constitutes a significant portion of total available billings (as is the case in refugee law).

Given the limited experience with franchising in the Canadian legal aid context, it is difficult to assess possible effects using such a system might have on legal aid costs. One can assume that lawyers who are franchised as exclusive providers of immigration and refugee legal aid services would seek to maximize the return they receive from the franchise. Depending upon the arrangements under which they would be paid, they could be expected to maximize the hours billed on any given file or to maximize the number of tasks done for a flat fee. To maintain an appropriate level of competition needed to modulate price pressures, legal aid authorities would have to ensure that the number of lawyers being franchised is periodically adjusted to match fluctuations in total caseload.

By definition, clients for legal aid services are the least able to pay high legal fees. Three factors serve to keep rates paid for legal aid services below the prevailing rates in the private market. First, lawyers in private practice do not incur costs to collect accounts receivable from legal aid authorities. They do not have to write off any bad accounts on their legal aid billings. Second, many lawyers providing services to legal aid clients do so for altruistic reasons. They consciously accept substantially lower incomes than their colleagues in other areas of legal practice do because they have a deep ideological commitment to serve severely disadvantaged people in the community. Third, many lawyers in private practice are underemployed. Legal aid work provides income they are unable to earn from private clients. Thus, in some very important ways the markets for legal aid and other private clients are separate. They are further separated by career immobility arising from natural inertia and fear of the unknown.

Although it is reasonable to suppose that the increased use of paralegals to deliver immigration and refugee legal aid services has the potential to increase cost savings, current data is not strong enough to conclude how substantial such cost savings might be. Detailed analysis of the range of services that can be provided by paralegals and the probable cost of such services requires empirical research.

Assisted self-representation is a variant form of service delivery for people who do not qualify for legal aid. It combines public legal education with summary advice, and, in some cases, limited legal assistance. However, the possible effectiveness of assisted self-representation in immigration and refugee legal aid is very limited because of substantial barriers related to language, literacy, and cultural experience.

Present legal aid tariffs provide limited scope for paying non-lawyers to provide services to immigrants and refugee claimants. With appropriate accountability and quality-control safeguards, paralegals and trained support workers affiliated with non-government organizations may be able to provide some representation services to immigrants and refugee claimants at a lower cost than lawyers can. Franchising arrangements could possibly facilitate the use of supervised paralegals and NGO workers to deliver some required services in relation to immigration and refugee matters. This could serve to reduce legal aid costs. However, careful evaluation of appropriately designed pilot projects is required before any definitive conclusion can be drawn in this regard.

Unique Drivers

The more immigrants and refugee claimants there are who require legal aid, the greater will be the cost of providing the required services. Since legal aid mainly covers refugee claims cases, the primary cost driver is the number of refugee claims made in Canada. Over the past four years the number of refugee claims has increased significantly.

The global population of refugees and internally displaced persons currently exceeds 18 million. In addition to this, there are many people who do not fit the legal definition of Convention refugee who migrate to countries like Canada to escape from intolerable conditions in their home countries. A combination of conditions in countries of origin and links with Canada influences the number of refugee claims that are made in Canada, as opposed to other developed countries.

The boundary between refugees and so-called economic migrants is often very thin. But the fact that the boundary is so thin makes it possible for prospective immigrants, particularly those from countries with poor human rights records, to use the refugee determination process as an alternative avenue for admission.

In 2000, over 90% of immigrants and refugees landed in Canada settled in Ontario, Quebec and British Columbia. The overwhelming concentration of refugee claimants in these three provinces has forced them to bear most of the legal aid costs in the immigration and refugee area.

Over the years, refugee claims made in Canada have represented between 4% and 8% of all claims made in the seventeen countries comprising Intergovernmental Consultations on Asylum, Refugee and Migration Policies in Europe, North America and Australia (IGC) [2]. Major shifts in claim intake in other countries have had very little impact on the number of refugee claims made in Canada.

It is sometimes hypothesized that Canada's liberal interpretation of the 1951 Convention Relating to the Status of Refugees and the 1967 Protocol to that Convention result in a higher number of claims being made in Canada. Review of the available data does not support this hypothesis. Canada's liberal interpretation of the Convention has not resulted in an increased volume of claims.

The presence of an anchor community of nationals from particular source countries may be a significant factor attracting individuals from these source countries to choose Canada as an asylum destination. Individuals seeking to be united with relatives who have already settled in Canada, but who do not qualify for landing in Canada through the regular immigration process, may be using the refugee determination process as an alternative entry channel.

Faced with significant restrictions on legal immigration, migrants are increasingly turning to migration agents and smugglers to assist them in gaining access to Canada. Ironically, the very measures that governments are taking to curtail illegal migration generally may be forcing asylum seekers to avail themselves of the services of smugglers since it is becoming increasingly difficult to gain entry without such professional assistance.

The activities of illegal smugglers may lead to more false asylum claims and to increased use of fraudulent identity documents. The Canadian enforcement response, including increased detention of undocumented refugee claimants and increased interventions by Minister's representatives at RPD hearings, may lead to longer, more adversarial hearings. This could also increase legal aid cost. But if such enforcement initiatives deter refugee claims, legal aid costs could decline.

Bilateral And Multilateral Agreements And "Safe Third Country" Provisions

The Dublin Convention and Schengen Agreement are agreements that coordinate immigration policy in Europe to encourage asylum claims to be made in the first member state entered while also ensuring the free movement of people across the borders of member states. These European agreements do not appear to have had any effect on the volume of refugee claims in Canada.

Canada has entered into a "safe third country" agreement with the United States. The underlying logic of this provision is that genuine refugees should reasonably be expected to claim asylum in the first safe country in which they arrive after leaving their home country. CIC predicts that the agreement will significantly reduce refugee claims volumes, which could significantly reduce legal aid costs.

However, there may also be legal aid costs associated with this agreement. More claimants may travel by smuggler, destroying travel documents to hide their route, and procedural arguments related to which country has responsibility will arise. Also, until precedent is set, costly cases challenging the fairness of certain asylum policies in the United States, particularly with regard to detention of asylum seekers, are likely to arise.

Implications Of Mass Arrivals Of Refugee Claimants

Organized mass arrivals of asylum seekers, such as the arrival in 1999 of four boatloads of migrants from China who claimed refugee status, attract considerable media attention. The impact of such exceptional events on legal aid costs depends on how Canadian immigration authorities respond. If the claimants are dealt with in the ordinary course the primary cost implication is related to the number of claimants involved who require legal aid. However, if the government responds with special measures, such as they did in British Columbia where the claimants were detained in provincial jails distant from Vancouver, money has to be found to cover the added legal aid costs associated with periodic detention review hearings and the added costs associated with providing legal representation to persons who are being held in secure detention facilities.

Domestic Considerations

Immigrants who are trying to enter Canada will naturally gravitate to the refugee determination process as a path of access if the barriers to regular immigration are inordinately high. This may occur because family reunification is difficult or because Canadian consular services are difficult to access in the home countries. Many of these individuals have valid refugee claims, but they would be just as happy to come to Canada through regular immigration channels if that were a practical and accessible option. If more of these cases could be handled through regular immigration channels there would be some costs savings to legal aid plans.

The factors that draw individuals to claim refugee status in Canada operate independently of the factors governing overseas selection of refugees. Therefore, measures to increase overseas selection of refugees for resettlement in Canada are unlikely to reduce the number of refugee claims made in Canada. Increased resettlement of refugees selected overseas may, in fact, attract additional inland refugee claims from relatives of the persons who are selected from overseas.

Although they currently account for less than 1% of legal aid expenditures, the frequency of "danger opinions", where the Minister of Immigration or the Solicitor General jointly certify that a claimant is inadmissible to Canada as a security risk, and the litigation cost associated with such opinions may rise as a result of post-September 11th enforcement activities. This could become a new cost driver for legal aid, should the use of danger certificates increase significantly or should tariff allowances be increased with respect to more complex cases.

Legal aid coverage for immigration inquiries before the Adjudication Division of the IRB, which is the first step in removal proceedings, is available in only four provinces (which do not include Ontario). Eligibility for coverage is subject to a merits test. Per case costs are low, as are current volumes. Though removals are becoming more common, immigration inquiries still represent a very small portion of total costs and are not driving costs in any significant way.

Refugee claimants are initially interviewed by CIC officials to gather information needed to facilitate security checks and eligibility determinations. The Supreme Court determined in 1991 that these interviews are not analogous to a hearing, so there is no right to counsel at the interviews. No legal aid plans in Canada currently provide coverage for point-of-entry interviews. However, many refugee advocates argue that the nature of these interviews has changed since that Supreme Court decision was rendered as the interviews have become more structured, rigorous and important to downstream decision making. Should legal aid be required at this stage it could be a very large additional cost, perhaps requiring the implementation of duty counsel systems supported by paralegals. However, the possibility of legal aid being extended at this stage is not imminent, so this is not a cost driver at this time.

Specific Challenges

Expenditures for translation and interpretation services represent over 16% of legal aid expenditures on immigration and refugee matters in British Columbia and Ontario. This is a significantly higher portion than in other areas covered by legal aid, such as criminal and family law. Required expenditures for expert assessments and reports from medical doctors and psychologists' are also a significant cost driver in relation to immigration and refugee legal aid, though not as significant as the cost for interpretation and translation services.

Most refugee claimants are totally unfamiliar with the Canadian legal system. Refugee claimants who are victims of torture, gross sexual abuse, or other extreme trauma often have great difficulty relating their experiences. Lawyers must often work through interpreters when communicating with refugee claimant clients. All of these factors make it necessary for lawyers to spend more time preparing refugee claimants for hearings than is required when dealing with other clients. However, case preparation time is limited under all immigration and refugee legal aid tariffs. Legal aid authorities rarely pay lawyers for required work beyond the specified time limit. Therefore, the extra time that lawyers must spend on case preparation does not have a significant impact on immigration and refugee legal aid costs.

Canada recognizes that persecution based upon gender falls within the 1951 Convention Relating to the Status of Refugees. Although "gender-based claims" are more readily accepted in Canada than in many other IGC countries, the number of gender-related claims received in Canada is still very small. Therefore, the relatively expansive Canadian approach on gender-related claims is not a significant legal aid cost driver.

Procedural Requirements

The RPD has authority to determine manifestly well-founded refugee claims without holding a formal hearing. Legal aid costs can be considerably lower for cases dealt with through this expedited process than they are for cases determined in regular hearings. Therefore, increased use of the expedited process offers a significant way to achieve legal aid cost savings in jurisdictions where lawyers are paid at an hourly rate. (There are no cost savings if lawyers are paid block fees or flat fees.) However, the use of the expedited process is constrained by several factors, the most significant of which is the portion of well-founded claims that can be reasonably determined without a hearing.

In provinces that pay lawyers an hourly rate for time spent in hearings, the duration of hearings is clearly a cost driver for legal aid. The length of hearings is a function of a complex interplay of factors, most of which are out of the control of legal aid authorities - complexity of the case, skill of the presiding member, and strategies used by protection officers, the Minister's representatives and lawyers. It has been hypothesized that paying lawyers at an hourly rate leaves the system open to 'supplier-induced demand'. If the average length of refugee hearings could be reduced, significant cost savings could be realized. For instance, the average length of refugee hearings in Montreal, where lawyers are paid a flat fee for each case regardless of how much time they spend on the case, is almost 20% less than in Toronto and 33% less than in Vancouver, where lawyers are paid an hourly fee for actual time spent in hearings. If the average length of hearings in Toronto were reduced to the length of hearings in Montreal, legal aid costs in Ontario could be reduced by $280,000 a year.

Decisions of the IRB are subject to judicial review on leave of a judge of the Federal Court. These cases are quite costly. The overall cost has been kept down because leave for judicial review is granted in only a small portion of cases. This situation could change significantly if there is an increase in the number of cases where leave is granted following implementation of the IRPA, as the Federal Court is called upon to clarify issues of interpretation with respect to the new legislation.

Appeal proceedings before the Immigration Appeal Division (IAD) of the IRB are not a significant legal aid cost driver. Removal and sponsorship appeals are rarely covered under legal aid plans. Permanent residents who are attempting to sponsor relatives for landing in Canada are generally in an income bracket that disqualifies them for legal aid.

Under the former Immigration Act, unsuccessful refugee claimants who were facing removal had two additional avenues of recourse beyond judicial review. They could apply to be recognized as a member of the Post Determination Refugee Claimants in Canada Class (PDRCC) and they could submit a humanitarian and compassionate appeal (H&C). Legal aid costs relating to these proceedings were not high, so PDRCC proceedings and H&C appeals did not constitute a significant cost driver for legal aid plans.

Legislative And Jurisprudential Developments

Recent legislative and policy changes, specifically implementation of the new Immigration and Refugee Protection Act (IRPA) and the anticipated implementation of a Safe Third Country Agreement between Canada and the United States, are expected to drive immigration and refugee legal aid costs in a number of different ways.

Under IRPA, immigration officers are required to determine eligibility of refugee claims to be referred to the Refugee Protection Division (RPD) of the Immigration and Refugee Board within three working days after a claim is received. Immigration officers have the authority to re-determine eligibility at any time before a final decision is made on the claim. These measures are unlikely to have any significant impact on legal aid costs.

Under IRPA the quorum for refugee status determination hearings has been reduced from two to one RPD member. It is anticipated that as a result of this change, the number of claims determined by the RPD across Canada will increase by 17% - 20%. The impact of this change will be felt most strongly in Toronto, which had the lowest level of hearings conducted by single member panels prior to implementation of IRPA. Any increase in the complement of RPD members appointed to Toronto to help clear the backlog of claims that has built up over the last two years will likely result in a further short-term increase in legal aid costs in Ontario.

Another possible effect of the move to one-member panels is that RPD members who have relatively limited experience presiding at hearings may have some difficulty keeping their hearings focused. This may result in lengthier hearings, which could increase legal aid costs in those jurisdictions that pay for actual time spent in hearings, without any cap. It is also possible that there will be an increase in the number of reviewable errors made by new members who are conducting hearings alone without the opportunity to consult a more experienced colleague. Any resulting increase in the number of cases where leave for judicial review is granted and where RPD decisions are quashed and have to be re-heard will be reflected in an increase in legal aid costs. However, the cost increases resulting from all of these factors combined are likely to be quite small as a portion of total immigration and refugee legal aid costs.

Under IRPA, the RPD has been given jurisdiction to grant protection on a variety of grounds that formerly were covered in separate proceedings. Dealing with all risk-based grounds for protection in a single proceeding eliminates the Post Determination Refugee Class in Canada (PDRCC) proceedings and greatly reduces the scope of humanitarian and compassionate appeals (H&C), for which legal aid was provided in some provinces. The immediate impact of this change on legal aid costs will be fairly limited because the amount spent on PDRCC and H&C appeals was quite small.

The consolidation and expansion of the protection grounds has generated some uncertainty that is likely to give rise to legal arguments regarding interpretation, which may lengthen RPD hearings. One can anticipate that there will also be series of test cases as the Federal Court is called upon to provide definitive guidance on the meaning of the legislative changes. The resulting increase in legal aid costs may well offset any saving resulting from elimination of PDRCC and reduced demand for H&C appeals, at least in the short term.

IRPA also establishes a new Refugee Appeal Division (RAD), which is mandated to decide appeals relating to RPD status determination decisions. However, implementation of the provisions relating to the RAD has been delayed. Legal aid cost implications of implementation of the RAD could vary widely, depending on whether there is a significant decline in the number of applications for leave for judicial review and in the number of cases in which leave for judicial review is granted. There could be a saving in legal aid costs in cases where the RAD is able to correct errors in RPD decisions without remitting the claim for a new RPD hearing, and where unsuccessful appellants do not apply for leave for judicial review. However, in cases where RAD decisions become the subject of applications for leave for judicial review, any legal aid costs associated with the RAD proceedings would be entirely new. On balance, it is estimated that implementation of the RAD will generate a net increase in legal aid costs at the national level in the range of $1.2 million to $2.6 million.

Unsuccessful refugee claimants, repeat claimants, and any persons whose refugee claims have been determined to be ineligible for referral to the RPD will be able to apply for a Pre-Removal Risk Assessment (PRRA) when removal from Canada is imminent. This assessment will be limited to evidence that has not previously been considered by the RPD. It is anticipated that in cases where there has been no prior hearing on the merits of a refugee claim and in other cases where credibility of the claimant is in issue, a hearing will be required. Other PRRA proceedings will be based on review of written submissions, similar to PDRCC applications under the former Immigration Act. If legal aid coverage is provided for PRRA proceedings, costs would likely be similar to costs per case on claims where an RPD hearing is required. Legal aid costs relating to PRRA based on written submissions would likely be similar to those formerly associated with PDRCC applications or H&C appeals.

Under IRPA, at any time before the RPD finalizes the determination of an asylum claim, an immigration officer may reverse a previous eligibility determination. This could raise legal aid costs because claimants whose cases are suspended with likely apply for legal aid for the admissibility determination before the Immigration Division and effort may be wasted on cases that are recalled. The eventual cost impact will be determined by the extent to which legal aid plans expand coverage to refugee cases before the Immigration Division and by the way CIC applies this new power, both of which are difficult to determine in advance.

Under IRPA, all repeat claims, including prior claims that the RPD has determined to have been withdrawn or abandoned, will be dealt with in the PRRA process rather than being referred to the RPD to be determined. This change is expected to have limited impact on legal aid costs. However, dealing with repeat claims in the PRRA process is likely to be less costly than under the former Immigration Act where the previous CRDD determination could be completely re-litigated in a repeat claim.

The package of security legislation enacted by Parliament in the wake of the terrorist attacks in the United States on September 11, 2001 is unlikely to have any significant impact on immigration and refugee legal aid costs.

Delays In Processing

Delay in processing refugee claims has the potential to drive legal aid costs in two ways. First, it tends to increase the amount of work that has been done with respect to individual cases, necessitated by rescheduling and extra time spent in hearings. Second, delay in making final determinations on asylum applications, and delay in removing failed claimants, encourage the abuse of the asylum determination process as a means of bypassing regular immigration channels.

An examination of how case backlogs - which is one indicator of increasing processing times - affect overall refugee volumes indicates that delays in the overall time failed claimants can remain in Canada stimulates additional claims because it makes this form of "temporary residence" in Canada an economic alternative for migrants.

All of this is a two-edged sword with respect to legal aid costs. Delay in removal appears to be one of the factors driving intake of refugee claims, and therefore driving demand for legal aid services. However, efforts to discourage demand could drive legal aid costs, should they involve remedies used in other countries, such as increasing the number of detentions or expediting removal procedures, which might give rise to costly legal challenges based on Charter of Rights and Freedoms arguments.


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