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Why is personal injury bar so against ABS?

|Written By Yamri Taddese

With alternative business structures promising to be a key focus of debate for the legal profession this year, it’s clear significant opposition will be coming from at least one part of the bar: personal injury lawyers. But what is it about the idea that has them so worried?

Non-lawyer owners of law firms wouldn’t be keen to fill the gap in access to justice where it hurts the public the most, says Steve Rastin.

Charles Gluckstein, a personal injury lawyer and a former president of the Ontario Trial Lawyers Association, disagrees with the idea that alternative business structures would bring down prices for legal services. “That’s highly flawed and especially true in terms of its flaws when it comes to personal injury,” he says, suggesting the personal injury bar doesn’t have a problem when it comes to access to justice.

The vast majority of personal injury lawyers work on a contingency-fee basis, Gluckstein notes, something he says is “probably the ultimate message for access to justice.”

For personal injury law, alternative business structures can only have negative outcomes, especially given what would happen if insurance companies owned law firms, according to Gluckstein.

“Imagine the circle of care the insurance company is looking to control when persons injured in an accident are insured with them,” he says.

“They control the lawyers’ fees, they control the rehabilitation costs, the award the individual is going to get, and the whole problem is covered under their umbrella. That’s what’s happening in the U.K. It’s allowed to occur. Insurance companies own law firms and they own the insurance companies.”

Brian Cameron of Oatley Vigmond Personal Injury Lawyers LLP says the idea that alternative business structures would improve innovation in the legal industry is “utter nonsense.”

“In fact, I think it’s going to retard innovation because there is no longer an incentive [to innovate],” he says.

“For me as a lawyer, if I’m part of a big corporation that’s doing things and making money on volume, I personally have no reason to innovate, I have no reason to take pro bono cases, to change the law for the benefit of my clients, which I do a lot. I have no reason to do any of that. I’m working for a big corporation and getting a cheque.”

To argue that alternative business structures would foster innovation in the delivery of legal services is to say “Walmart innovated retail,” according to Cameron. “All Walmart did is do it bigger,” he says.

Doing law in that way will also mean bad service, says Cameron, who calls alternative business structures “a disastrous idea.”

Under alternative business structures, firms would abandon unpopular cases as corporations try to protect their brand, he adds, suggesting the focus would turn solely to the bottom line and pleasing shareholders.

Steve Rastin, current president of the OTLA, says non-lawyer owners of law firms wouldn’t be keen to fill the gap in access to justice where it hurts the public the most: family and criminal law.

“If you were to look at Slater and Gordon in Australia, they will freely admit that their vast majority of work and their income is in the area of personal injury law,” he says.

“ABS is being touted as a potential solution to the access to justice problem. But this does not enhance access to justice. Slater and Gordon will tell you that something like one per cent of their income is derived from family law.”

Going down a similar path would be bad news for Ontario firms, he says. “The reality is that if ABS comes to Ontario, they [corporations] are going to come in and focus on taking over and absorbing personal injury firms.

There isn’t going to be an enhanced level of access for family law or criminal law. At least, that hasn’t been what’s been happening in England and Australia.”

Lawyer Mitch Kowalski, author of the book Avoiding Extinction: Reimagining Legal Services for the 21st Century, says the response from the personal injury bar reflects “an irrational fear.”

“Their arguments, like most arguments against ABS, are based on emotion and conjecture. They’re virtually devoid of evidence,” he says.

“We have 15 years of experience in Australia. That’s a pretty long clinical trial.”

There’s no evidence from Australia that alternative business structures are bad for lawyers or, more importantly, for clients, he says. “It may be bad for lawyers, but the real question is, is it good for consumers because it’s more important for things to be good for clients than for lawyers.”

Kowalski has been to the Melbourne, Australia, offices of Slater and Gordon, where he says the firm offers a broad spectrum of legal services. The Australian firm Salvos Legal has taken 11,000 pro bono cases in the last four years, according to Kowalski.

“You cannot create a law firm to do pro bono work in that way without ABS.”

To the argument that there isn’t an access to justice problem in personal injury law, Kowalski says lawyers need to look beyond just the silos of their own practice area.

The law society released a discussion paper on alternative business structures in September hoping to draw out the profession’s thoughts and concerns. In its response, the OTLA resoundingly rejected the idea, casting doubt on the benefits of alternative business structures and saying the technological advances touted by their proponents are “overstated.”

“Technological change is already occurring at various rates throughout the legal profession. It is not clear that ABS can provide innovation in delivery of legal services that lawyers practising in traditional firms cannot,” according to the OTLA’s submission.

In its submission to the law society, the OTLA also says it would be costly to regulate under the new approach given the potential for conflicts of interest. “It would not be adequate for the law society to simply create new rules in the hope of protecting the public against the types of conflicts of interest that are inevitable in an ABS environment. This will require significantly increased resources and infrastructure for LSUC to regulate such matters. There is scant evidence from other jurisdictions that ABS leads to significant technological innovation.”

The OTLA also says its working group studied the issue and found there’s no empirical evidence that public ownership of law firms had increased access to justice in other jurisdictions. “The focus of many who discuss the issue of access to justice is that lawyers are expensive and that litigation is costly. However, those assertions fail to take into account the particular context in which the legal services are required. If a highly contentious family law or contractual issue is at the forefront of the dispute, then it is difficult to see how ABS will effectively decrease the costs of that litigation in a way that will increase ‘access to justice’ for the parties involved.

“Certain litigation is inherently expensive. The costs are driven by protracted timelines and other vagaries of the legal process itself. ABS will not materially contribute to the efficiency of the legal process or reduce the costs inherent in the litigation model, without the nature of litigation changing dramatically.”

  • Ken Chasse
    Law societies can discipline lawyers, but they can't discipline investors. And prevention of improper interference with the duties as to being an officer of the court, and interference with the fiduciary duty to clients, has to be strong because detection will be zero when ABS's control law firms.
    If law societies performed their duties in law, the problem of unaffordable legal services would not exist; ABS proposals would not be considered nor thought ethical or constitutional; and the scandalous behaviour of LSUC's "fast-tracking" ABS proposals while ignoring the unaffordability of legal services problem would not be happening.
  • Ken Chasse
    See:
    “What a Law Society Should Be — A Response to the Law Society of Upper Canada's Alternative Business Structures Discussion Paper of September 24, 2014” ; at:
    http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2549960
  • brian francis
    I'm confused. Mr. Gluckstein tells Law Times that there are no access to justice problems in the Ontario personal injury context. Then, only days later, a charter challenge of Bill 15 is launched because injured accident victims are being denied access to the courts. Which is it - does OTLA acknowledge access to justice problems within its legal turf - or not?
    https://www.campisilaw.ca/constitutional-challenge-launched-against-flawed-ontario-liberal-government-auto-insurance-legislation/
  • Ted Bergeron
    I can't imagine how you could be confused Brian. The issues are distinct. Access to legal services (the problem ABS purport to address) vs access to the courts (the problem created by Bill 15). No need to be coy in honest and open debate.
    [quote name="brian francis"]I'm confused. Mr. Gluckstein tells Law Times that there are no access to justice problems in the Ontario personal injury context. Then, only days later, a charter challenge of Bill 15 is launched because injured accident victims are being denied access to the courts. Which is it - does OTLA acknowledge access to justice problems within its legal turf - or not?
    https://www.campisilaw.ca/constitutional-challenge-launched-against-flawed-ontario-liberal-government-auto-insurance-legislation/[/quote]
  • brian francis
    For years OTLA has been silent about the shoddy assessment issue often chronicled in the Toronto Sun. Rogue experts and endless battles between competing experts - not to mention cases with nearly fifty assessments - helped choke FSCO's adjudication system.
    Put simply- the proliferation of "hired gun" experts caused endless delay and unnecessary cost within FSCO's adjudication system. This was/is an access to justice issue. Ignoring it, as OTLA did - is what opened the door to the change in Bill 15 re curtailed access to the courts (another access to justice issue). Had OTLA not ignored the shoddy assessment/rogue expert problem within its turf there might never have been the out-of-control FSCO backlog that created space for the IBC to convince the Liberals to make the legislative changes OTLA now challenges. Not to be "coy" - and like it or not - OTLA's indifference to systemic, delay-causing shoddy assessments makes it the author of its own misfortune (or rather its clients').
  • Jamie Hildebrand
    One has to wonder: if it turns into something like HMO's in the U.S., they determine what testing, treatment, duration etc,. a patient will receive, based on statistical criteria primarily associated with cost - this is likely in direct contrast to the criteria that the Dr would use following his or her professional ethics and responsibilities. This would be a constant tension - perhaps it could be addressed, but it would be substantial - and there is no doubt that economic pressure, in the glib, short term sense, will be a tremendous force against our quaint notions of professional responsibility.
  • CBA Legal Futures
    A few key points to be made in the discussion about what alternative business structures would mean for access to justice and the future of the legal profession in Canada: While the CBA report Futures: Transforming the delivery of legal services in Canada recommends the adoption of ABS, no one is talking about imposing a specific type of business structure. We need to experiment, test and validate different approaches to find the best ones. And to the objection that a non-law-firm owner might dictate how certain cases are to be handled, or which can be handled at all, we would say that the need to protect the basic ethics and values of the legal profession must be part of the ABS discussion. We believe it can be accomplished through appropriate regulation. Moreover, it is incumbent on the profession to do its part to increase access to justice.
  • Stephen Scott
    I do not understand your explanation of Mr. Gluckstein's position.

    On the one hand you write: "Charles Gluckstein, a personal injury lawyer and a former president of the Ontario Trial Lawyers Association, disagrees with the idea that alternative business structures would bring down prices for legal services."

    Then you write:


    "For personal injury law, alternative business structures can only have negative outcomes, especially given what would happen if insurance companies owned law firms, according to Gluckstein."

    Can you explain? What does Mr. Gluckstein think?
  • brian francis
    Mr. Gluckstein thinks the personal injury bar has no access to justice issue that need solving. For him - the system is as good as it gets - ergo - for him all this talk about ABS is of no interest - hence his dismissiveness.
  • Bob Munroe
    ABS is being proposed as a solution for "access to justice" issues but there is no evidence to support this. The LSUC should focus its energy on lobbying for increased legal aid funding, student loans for law students to increase the number of lawyers and simplification of procedures to help self represented people. ABS is about "access to profits" for giant off-shore law firms and their investors not about "access to justice".
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