Inaugural lecture

Courts, Competition and Innovation

Maurits Barendrecht HiiL – Hague Visiting Professor on the Rule of Law • Professor of Private Law at Tilburg University, TISCO • Chairman Executive Board of Innovating Justice

Courts

Competition

Innovation

The Third Branch

Charles Louis de Secondat,

Baron de La Brède et de Montesquieu

(Château La Brède, 18 January 1689 –

Paris, 10 February 1755)

The Third Party

Alec Stone Sweet, Political Scientist at Yale

1999

• ‘The triad, two disputants and a dispute resolver, is a universal, if undertheorized, phenomenon.

• It is a ‘primal technique of organizing social authority and, therefore, of governing.

• Triads serve ‘to perpetuate the dyad, given changes in the preferences or identities of the two parties.

• The triadic entity responds to, and is

a crucial agent of, social change.’

Trilateral Governance

The third party is needed if:

• The relationship requires specific investments

• It is impossible to set precise rules because of uncertain future

• Opportunistic behavior (stealing, cheating and violence) is possible

Oliver Williamson, Nobel Prize Economics 2009

Courts help people to decide in their most difficult moments

• Who gets what if relationships break down • What should happen in unexpected and

unclear situations • Remedies when somebody cheated or used

violence

30.000 new divorces; 100.000 terminations

of employment by employer; 700 people

killed in road traffic accident; 20.000

personal injuries in road traffic accidents;

1.000.000 unpaid debts for which

enforcement is sought; 10.000

bankruptcies; 1.700.000 conflicts related to

purchase of products or services;

15.000 asylum seekers; 180.000 building

permits

200 homicides; 170.000 victims of

violence; 150.000 instances of burglary

Problems in The Netherlands | yearly

In countries torn by civil war

People reporting effects in immediate family:

• 20% someone displaced

• 15% imprisoned

• 10% tortured

• 15% home looted

• 10% deaths

Worldwide: 4 new civil wars each year

and 50.000 – 200.000 battle deaths per year

Conflict, Security and Development,

World Development Report 2011

Moet nog worden aangeschaft

It is hard to make the triangle work ...

Their needs and their hopes …

Making defendants participate …

Supervising the interaction

Supervision

• Voice and participation

• Sorting out what happened (fact-finding)

• Negotiation

• Growing towards an acceptable solution

• Fit with earlier solutions (laws and case law)

• Deciding what parties cannot decide

Being there

The miracle …

By being there, third parties provide:

• Shadow of law

• Space for voice, participation, dialogue

and conciliation

• Option of participation by public

• Threat of an imposed solution and sanction

The art of being there …

• Prepared to intervene

• Fast … (available just in time)

• Known to work towards effective solutions

• Being predictable

• Not costly

90% of problems solved fairly by parties

The Void: Justice Sector Analysis

• Sarat and Grossman 1975:

Problems in Mobilization of Adjudication

• Landes and Posner 1979: Submission problem

• Botero et al. 2003 and Cabrillo et al. 2008:

Insufficient incentives on courts to offer better

services

• Carothers 2006 and Fukuyama 2011:

Rule of law and accountability very hard to

implement

• Hadfield 2008:

Regulation of legal profession blocks innovation

What About Courts?

• Third parties and thus courts always ermerge.

We need them in our relationships.

• Fascinating triads.

Three complex relationships at the sides of the triangle. Provide miracles by being there.

• Difficult to run.

Two clients each want something else. Judges are isolated from incentives. Have to motivate themselves and each other.

Courts

Competition

Innovation

Consider

these

situations

…

‘High workloads are

unlikely to be caused

by a worldwide

increase in conflicts

between people.’

Learning from competition

• Being just in time

• Focus on substantive justice not hindered

by procedural and bureaucratic issues

• Costs of access to justice

• Making settlement and plea bargaining

more fair

• A need for informational justice

• Impartiality and independence can be traded

• Local justice, in the community, seems to work

• Specialisation works

An entrepreneurial

judge responding to

demand for justice?

Baltasar Garzón: Investigating Drug Cartels, Marbella mayor and

Atletico Madrid owner Gil, Pinochet, ETA crimes, Franco time atrocities,

Guantanamo Bay

Entrepreneurial at times ……

Forum shopping …

• Part of the litigation game (Eisenberg and

Clermont 2002)

• Entrepreneurial judges and other 3rd parties

• Create new options for complainants

• So access to justice is improved

• State courts compete with other third parties.

• Courts can learn from them. Competition shows their strengths and their weaknesses.

• Individuals and groups seeking access to justice vote with their feet. Forum shopping cannot be stopped.

New third party mechanisms will be created by social entrepreneurs to satisfy demand for accountability. This should be welcomed.

Courts and Competition

Courts

Competition

Innovation

‘If courts sit still, they may gradually

become less relevant.’

• Scenario 1: A threat?

Production targets, but no realistic option to make

services better and more affordable

• More stressed judges, more errors

• Clients wait, powerful defendants win, clients walk away

• Courts criticized, judges ask to respect courts

• Scenario 2: Signal courts are valuable?

Innovate to serve clients better at lower costs.

More willingness to pay (users, governments)

• Judges motivated

• Clients happy, more respect for courts

• Budgets more secure and more independence

Responses to more demand

‘An interesting innovation making its way

through courts worldwide is known as

Hot Tubbing.’

No easy answers: 27 Factors have been found that foster Innovation

• Generating Possibilities 9 factors

• Developing Innovations 8 factors

• Replicating and Scaling Up 5 factors

• Analyzing and Learning 5 factors

Experience from Public Sector Innovation, applied to

Justice Sector, combined with international literature

on Court Reform, Procedural Reform

Innovating Justice at local court in Nicaragua

A judicial facilitator:

Member of judge team, mediates,

informs, helps with documents

Generating possibilities

1. Vision and commitment from government

2. Focus on users, frontline staff and middle managers

3. Diversity

4. Scanning of horizons and margins: a process need

5. Developing capacity for creative thinking

6. Working backwards from outcome goals: terms of

reference

7. Creating time and space

8. Allow breaking the rules

9. Competition: the submission problem and regulation of

legal services

Service of Judicial Facilitators

Pedro Vuskovic Céspedes Coordinator of the Inter-American Program of Judicial Facilitators

Organisation of American States

Winner Innovating Justice Awards 2011

Developing innovations

10. Appropriate selection of fruitful ideas: simplifying

procedures

11. Adequate risk management

12. Fostering innovation champions

13. Creating incubating space

14. Involving incubators and public-private partnerships

15. Introduce modeling, build prototypes

16. Better funding for early development

17. Involving end users at all stages

Justice Innovators

Modern Investigative Techniques | Karen Tse, Founder and CEO International Bridges to Justice LawGuru.com | Bahman Eslamboly, President LawGuru Programa Interamericano

de Facilitadores Judiciales | Pedro Vuskovic Céspedes Coordinator of the Inter-American Program of Judicial Facilitators Organization of American States The

eBay/PayPal Resolution Center | Colin Rule, CEO Modria.com I Paid A Bribe | Ramesh Ramanathan, Co-founder Janaagraha Centre for Citizenship and Democracy E-

Court, the first online private court | Henriette Nakad, Founder E-Court Foundation Weagree | Willem Wiggers, Founder Weagree B.V. The IMI Inter-Cultural Mediator

Competency Certification | Inter-Cultural Taskforce, IMI Use of Medical Experts to Secure

Release from Pretrial Detention in Russia | Dmitry Dinze, Humanitarian Action

The eBay/PayPal Resolution Center

Colin Rule

CEO Modria.com

Nominee Innovating Justice Awards 2011

Court architecture or web design?

Replicating and scaling up

18. Improved incentives for individuals and teams

19. Improved incentives for organisations: a sound

model for financing and monitoring courts

20. Scaling up and disruptive innovation

21. Specialise and beware of early standardisation

22. Change management

Analysing and learning

23. Metrics for success

24. Real time learning: change immediately if something

does not work

25. Peer and user involvement in feed-back

26. Double loop learning

27. Test from variety of perspectives

A methodology to measure effects and to compare users’ experiences with third party procedures

What court leaders can do …

• Trilateral governance in our most difficult moments

Professionals, relationship doctors, miracle providers rather

than production workers

• Allow to break rules and develop working methods

Focus on what works, what is fair, informed by rules

• Better incentives and sound system for financing

courts | Create competition and choice, terms of reference,

surveys of participants, monitoring whether interventions

work

• Create space for judges | 10% of time, 3% of budget,

recognition, partnerships

• Invite judges to an open, nurturing, knowledgeable,

competitive environment, fascinated by courts