Regulation is key in creating an enabling environment where innovations can grow into gamechanging services. In many countries, detailed rules of procedure exist for courts that are difficult to change. Strict regulations may exist where only lawyers can give legal advice. This keeps new service delivery models such as one stop shop procedures or problem-solving courts from entering the legal sector.
At the same time, some kind of regulation is needed. Courts and providers of legal services intervene in people’s lives and in their relationships. The fairness and quality of these interventions needs to be assured. Moreover, both parties need to cooperate. People’s justice needs should be respected, but also reconciled. The parties need to be stimulated to work together and to comply with decisions about appropriate interventions. What is a good way to regulate justice services?
As is described in this case study, LegalZoom provides affordable user friendly contracts and legal advice online, to individuals and small businesses in the USA. Despite becoming commercially successful, the company got entangled in a web of rules, and had to battle several court cases until regulations were modified to allow it to operate. Gamechangers such as LegalZoom have the potential to increase access to justice at a scale that old models cannot. Regulations need to change to accommodate such service delivery models.
The regulatory framework for legal services is being criticised, because it stifles innovation, impedes access to effective legal solutions and the legal profession is too heavily involved. A very thorough analysis of Legal Markets has been conducted by Professor Gillian Hadfield in the Journal of Economic Literature. One finding is that the market for consumer justice services needs a different approach compared to “big law” serving corporations and governments. The website Legalevolution.org has regular updates on regulation.
Following up on this criticism, independent regulators have been set up in England and Wales. The state of Utah in the USA was the first to establish a regulatory sandbox for non-lawyers and new business models providing legal services. Research institute IAALS is following the developments in other states on a day to day basis (see Unlocking Regulation). Several provinces in Canada are following up and European countries also considering regulatory reform. In African countries, bar associations and the judiciary tend to be more open to allowing innovation, because their services only reach a tiny proportion of the population.
Less well studied is how court rules and procedures impact innovation. Ideally, new types of courts, court interventions and court procedures would be proposed, tested and implemented continuously. On the basis of what works to provide fair and effective solutions for citizens. In reality, this is left to justice politics in parliament and ministries, which can be messy.
Community Justice Services
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It is time to redesign the regulatory system for justice services. Innovation of justice services requires a level playing field. Current services and innovative solutions should be evaluated against the same criteria. How could such a system look like, based on this research and case studies?