Immigration and Refugee Legal Aid Cost Drivers
- 2.1 Case volume and demand for legal aid services
- 2.2 Government policy and enforcement activities
- 2.3 Process driven costs
- 2.4 Nature of cases
Chart 1 contains a summary of data relating to all legal aid expenditures in Canada over the 14 years from 1986-87 to 1999-2000. In the eight years between 1986-87 and 1994-95, expenditures across Canada increased by 195%, from $219 million to $646 million. Even adjusting for inflation, legal aid expenditures during that eight year period rose by 127% (Canadian Centre for Justice Statistics, 1996: Table 4). Faced with the prospect of uncontrolled growth in legal aid expenses, provincial governments and the federal government, which were providing almost 85% of all legal aid funding, imposed limits on the amount they were prepared to pay. Legal aid authorities were forced to reduce coverage and to impose other cost control measures such as tariff reductions and holdbacks on amounts paid to lawyers who provided legal aid services. From 1995 to 1998 annual expenditures on legal aid declined from $646 million to $454 million, a drop of almost 30%.
One consequence of the sharp expenditure drop from 1994-95 to1997-98 has been a reduction in the number of cases for which legal aid is provided. Chart 2 illustrates the shift in the number of legal aid applications received and approved and fluctuations in the total amount spent on legal aid across Canada from 1986-87 to 1999-00. Some of the savings realized in recent years have been achieved by reducing the cost per case for the legal aid services provided; however, the greatest saving has been achieved through cut backs in the number of clients served.
Legal Aid Resources and Caseload Statistics, 1994-95 and 1999-2000 - Tables 4, 9 & 10
Changes in the number of people qualifying for legal aid, and increasing incidence and complexity of legal proceedings for which legal aid is required, as well as changes to laws and policies affecting these proceedings, account for a portion of the cost fluctuation that has been observed. Other potential cost drivers identified include the way in which legal aid services are delivered, legal aid tariff structures, and what economists describe as "supplier-induced demand" . The sections immediately following provide a brief overview of key findings from the general literature on legal aid cost drivers.
One might reasonably assume that 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. The cost impact of increased demand for legal aid services is readily apparent from data on caseload trends in legal aid in Chart 2. The late 1980s and early 1990s were marked by dramatic growth in applications for legal aid, which itself was a function of increased demand and of expansion of the range of matters covered by legal aid programs. Between 1986-87 and 1993-94, the number of applications for legal aid across Canada increased by 35%. At the same time, the number of applications approved for legal aid increased by 40%. Expenditures on legal aid through that period rose much faster than the growth in the caseload (by 195% in current dollars, 127% in constant 1987 dollars). However, a significant portion of the expenditure increase can reasonably be attributed to the simple increase in the number of cases for which legal aid was being provided.
In 1994-95, Ontario, which operates the largest legal aid program in the country, imposed sharp limitations on the number of cases approved for legal aid. The resulting decrease in caseload was reflected in the national statistics. Paradoxically, total expenditures on legal aid in that year continued to climb. This is in part attributable to the normal lag factor. Many of the cases approved for legal aid in 1993-94 would not have been billed until 1994-95. As will be seen below, other factors may also have been driving legal aid costs. In any event, the full cost impact of the caseload reduction started to show in 1995-96, and since that time total expenditures on legal aid have declined roughly in line with the decrease in caseload. From 1995-96 to 1999-2000, the number of cases approved for legal aid decreased by roughly 31% and inflation adjusted expenditures decreased by 33%. In current dollar terms, expenditures decreased by 26% over that 5-year period (Canadian Centre for Justice Statistics, 2001: Table 4).
It is clear that during the period of rapid growth, between 1986-87 and 1994-95, expenditures increased at a much faster rate than the growth in caseload. After 1995, when the major restructuring of legal aid programs began to take effect, expenditures, expressed in constant dollars, declined slightly faster than the drop in the number of approved legal aid applications. The non-linear relationship between caseload and expenditures suggests that one must look beyond the simple factor of demand and resulting workload to identify a fuller range of legal aid cost drivers.
A number of possible factors affect demand for legal aid services. Demand for legal aid in criminal cases tends to be directly related to the number of criminal charges laid by the police . Charging activities are affected by policies, such as zero tolerance relating to domestic violence and impaired driving, and by the level of police presence in a community. Increased police presence tends to be accompanied by an increase in the number of charges laid. As more offences are observed and more offenders are apprehended, more charges are laid. Police attention and criminal charges are directed disproportionately to the portion of the population that falls below the income threshold applied to determine eligibility for legal aid (National Council of Welfare, 2000: 12-18). Thus police charging practices have a direct impact on the number of legal aid applications received and approved. This in turn drives legal aid costs.
The picture is much more complex with respect to civil legal aid. For a start, there is wide variation among provinces with respect to the civil matters covered . Also, costs with respect to civil matters, particularly with respect to custody and to immigration and refugee matters, have been more volatile than with respect to criminal matters. In a detailed analysis of legal aid expenditure patterns in Ontario, Owen Lippert and Stephen Easton (1997: 231-233) noted that in every criminal category other than homicide, the trend in expenditures was converging with case volume, that is toward a percentage of spending consistent with the percentage of cases in each category. On the civil side, the percentage expenditures on immigration and refugee cases, and to a lesser extent on contested divorces, was increasing relative to the percentage of these cases in the overall caseload.
Notwithstanding the greater volatility in civil legal aid expenditures, there is a loose correlation between the level of coverage and program costs. The increase in program expenditures observed through the late 1980s and early 1990s was accompanied by an expansion in the range of civil cases for which legal aid was provided. Conversely, the contraction that took place in the late 1990s resulted in part from removal of legal aid coverage for certain types of civil cases, for example the elimination of divorce and wrongful dismissal certificates in Ontario in 1995.
Demand (in the economic sense) for legal aid services is influenced, in part, by government policy and enforcement practices. LAO attributes a significant portion of the 21% increase in the number of criminal certificates issued between 1996 and 2000 to changes in the Criminal Code and other federal and provincial legislation affecting youths . In addition, LAO points to the decision by government to adopt zero tolerance policies in areas such as impaired driving and domestic violence as factors affecting demand for legal aid. These policy changes result in an increased number of charges and greater likelihood of incarceration upon conviction, which is a significant factor in determining eligibility for legal aid. On the civil law side, changes to the Mental Health Act contributed to a 126% increase in the number of mental health certificates issued between 1996 and 2001. Similarly, changes in the Child and Family Services Act and an increase in resources allocated to issues such as child protection and victims of violence led to increased demand for legal aid in these areas (Legal Aid Ontario, 2001b: 7-9; 2001c: 14-16).
Policy and legislative changes affecting immigrants and refugees have similar potential to influence demand for legal aid. The role of specific developments in this area is examined in detail in Chapters 3 and 6 of this report.
Procedural requirements imposed by courts and tribunals, and delays occasioned by backlogs and inefficiencies in court and tribunal processes affect the cost of legal aid services. For example, when court calendars are heavily backlogged and lawyers representing legal aid clients are required to attend multiple times at court simply to secure a hearing date, the cost of these appearances becomes a direct legal aid expense. Added steps, such as mandatory pre-hearing conferences may reduce overall costs if they result in cases being settled without need for a trial. But if they do not result in settlements or reduce the overall court time required to resolve cases, they increase legal aid costs. Changes in rules of procedure, such as the new Family Court Rules in Ontario, impose additional paperwork and case preparation requirements that are reflected in increased legal aid costs (Legal Aid Ontario, 2001b: 8).
Legislative, procedural and jurisprudential developments all have the potential either to increase or to reduce legal aid costs. It logically follows that 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.
It is commonplace for lawyers and judges to observe that litigation, in both criminal and civil matters, has become increasingly complex. Trials that typically lasted just a few days in the past now frequently take weeks to complete. This is in part a function of changes in the way in which lawyers conduct litigation, for example, with increased reliance on expert witnesses and increased resort to complex procedural and evidentiary motions. The Charter of Rights and Freedoms has also provided fertile ground for new legal challenges, particularly in the areas of criminal law, administrative law, family law, and human rights law. These are all significant subject areas for legal aid clients. The increase in case complexity has been accompanied by a corresponding increase in the amount of legal work that must be done on individual cases (Legal Aid Ontario, 2001c: 17). This has an impact on legal aid costs, just as it does on the legal service costs that are charged to private, paying clients.
The potential consequences for clients in individual cases also have significant legal aid cost implications. The more significant the outcome of a case is for the client, the greater is the pressure the lawyer is under to do everything possible to ensure that the client achieves the desired outcome. Cost of representation is not likely to be the foremost concern for individuals who face serious criminal charges, who are battling over custody of a child, or who face imprisonment, torture or death in their home country. When the gravity of consequences pushes a lawyer to expend greater effort on a client's behalf, the cost of legal representation will naturally tend to rise.
Negotiated settlement of cases can significantly reduce legal costs. This is one reason why mediation and other forms of alternative dispute resolution have become increasingly more prevalent in civil litigation. Clients involved in cases where everything can be reduced to a monetary sum will generally consider a negotiated settlement if the reduced legal costs will produce an equivalent or better economic outcome than they might get if the case went to trial. But with refugee claims, the only issue to be decided is whether or not an individual falls within the statutory definition of a Convention refugee or a person in need of protection. Cases of this sort cannot readily be resolved through a negotiated settlement. Legal costs tend to be higher when cases have to be determined in a hearing. Where cost of representation is covered by legal aid, which is the case for most refugee claimants, this cost is borne by the legal aid authorities.
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