Legal Services Supply Gap in Saskatchewan: Temporarily Offering Tax Incentives to Lawyers for Providing Pro Bono Services

“While almost half of Canadians will experience a legal issue in any given three-year period, many people do not resolve their legal issue with the assistance of a lawyer [often] due to being unable to…afford the cost of legal services”.¹

I. LEGAL SERVICES MARKET IN SASKATCHEWAN

There is a large gap in the legal services market between those who can afford a lawyer and those who cannot afford a lawyer but are too “wealthy” for legal aid. The average cost of a two-day trial in Canada in 2015 was $31,330, a five-day trial was $56,439, and a seven-day trial was $81,958,² while the median after-tax income for families and unattached individuals in Saskatchewan in 2016 was only $59,700.³ As a result, many Canadians cannot afford the cost of legal services and may look to legal aid or pro bono services for assistance with their legal issue.

The income cut-off for legal aid in Saskatchewan for a single person is $11,820 per year.⁴ Therefore, many low income and middle class earners cannot access legal services; they do not qualify for legal aid nor can they afford a lawyer. 74 per cent of firms in Canada admitted to providing no legal aid work within their firms.⁵ On top of this, many firms do not provide pro bono services.

Because of this, in 2018 the Legal Services Task Team (“Task Team”) delivered a Final Report to determine if service providers other than lawyers should be allowed to practice law within Saskatchewan.

II. LEGAL SERVICES TASK TEAM’S FINAL REPORT

The Task Team was assigned to determine whether or not service providers other than lawyers could provide certain legal services in Saskatchewan while still preserving the public’s confidence in the legal system.⁶ Specifically, the Task Team was to consider whether (i) authorizing non-lawyers to provide legal services would increase access to justice in the province, allowing the public to have increased choice in the level of service needed; (ii) the Law Society of Saskatchewan and the Ministry of Justice could provide more information on the types of services alternative legal services providers may offer; and (iii) the current system is the most effective way to regulate legal services in Saskatchewan.⁷

With these considerations in mind, the Task Team came up with ten recommendations, including:

1. 1. • expand the list of exceptions to the requirement that only lawyers can provide legal services to include additional classes of service providers;⁸
      • deregulate the provision of legal information so that anyone can provide it;⁹
      • examine whether the list of permitted tasks legal assistants and legal staff can do under direct supervision of a lawyer can be expanded;¹⁰ and
      • create limited licenses for the practice of law that could be granted on a case-by-case basis so alternative service providers operating within a specific, individualized scope of practice could provide certain defined services.¹¹

While these recommendations are likely to help increase access to justice, it seems as though some of these recommendations may take a long time to implement. As a result, encouraging or requiring lawyers to offer pro bono services in the meantime may increase access to justice for low income and middle class individuals.

III. PRO-BONO SERVICES

The topic of increasing pro bono services is highly relevant in Canada. Chief Justice Wagner recently stated that “more and more law societies…will require that part of being a lawyer is also giving some pro bono work, and that’s very good.”¹² This comment produced some backlash from lawyers who contended that requiring lawyers to offer pro bono services is not the way to go.

Lawyers have argued that making pro bono services mandatory raises a competency issue.¹³ Most lawyers are not generalists; they do not have experience and expertise in all areas of the law.¹⁴ The legal services needed for those seeking pro bono services are often in specialized areas, such as criminal and family law.¹⁵ It is a principle of our justice system that all individuals seeking legal assistance are entitled to competent representation. Requiring individuals who specialize in areas such as commercial litigation or taxation to provide pro bono services in other areas may lead to incompetent legal representation and, as a result, incorrect legal advice.

While these are valid concerns, according to a report by the Canadian Forum on Civil Justice, only 19 per cent of individuals with legal problems obtained legal services from a lawyer.¹⁶ Perhaps individuals, who cannot access the legal system, may actually need legal advice in more areas of law than lawyers presume. The areas of law needing the most extra legal services are employment, discrimination, personal injury, benefits, family, estates, health, housing, immigration, and consumer law.¹⁷ If lawyers in all areas of law were encouraged to provide pro bono services, this might increase access to justice. As a result, low income and middle class earners would have more opportunity to seek legal advice.

IV. TAX INCENTIVES FOR LAWYERS OFFERING PRO BONO SERVICES

Offering tax incentives to lawyers competent to offer pro bono services may be a viable solution to increase access to justice for low income and middle class individuals in need of legal services who cannot afford a lawyer but are too wealthy for legal aid, at least until the Task Team’s recommendations are implemented.

Tax expenditures are used by the government, in the form of tax credits, exemptions, or deductions, to provide subsidies to taxpayers who act in ways that the government seeks to promote.¹⁸ Essentially, tax incentives carry out the government’s various social and economic policy goals, typically when a direct spending program is not available or not realistic.¹⁹ If lawyers are permitted to deduct an amount he or she would have received from a paying client from his or her earnings, lawyers may be incentivized to offer pro bono services. Lawyers would be inclined to think of offering pro bono services as a way of decreasing their tax liability and increasing their income retained, instead of as an income burden.

Clearly, lawyers should provide pro bono services without an income incentive, but this does not seem to be happening. Inducing lawyers to offer pro bono services, at least until the Task Team’s recommendations are in place or pro bono services are made mandatory by law societies, may decrease the legal services supply gap and increase access to justice in Saskatchewan.

V. SUMMARY

There is a significant need for more affordable legal services amongst the large low income and middle class population in Saskatchewan. The Legal Services Task Team provided various recommendations to rectify this situation; however, change and implementation is a lengthy process. An alternative solution is to offer tax incentives to lawyers for providing pro bono services, thus increasing access to justice for this important sector of the population.

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^* JD Candidate (University of Saskatchewan)

¹ The Legal Services Task Team, “Final Report of the Legal Services Task Team” (August 2018) at i, online (pdf): <http://publications.gov.sk.ca/documents/9/107840-final%20report%20of%20the%20legal%20services%20task%20team.pdf>, archived: < https://perma.cc/GD36-RFK6>.

² Michael McKiernan, “The Going Rate” Canadian Lawyer (1 June 2015), online: <https://www.canadianlawyermag.com/author/michael-mckiernan/the-going-rate-2913/#tab_1>, archived: <https://perma.cc/QCQ7-HNM5>. The trial costs are from 2015 and would be greater in 2019.

³ Jennifer Quesnel, “Sask. Incomes Drop for 2nd Straight Year, StatsCan Says”, CBC News (14 March 2018), online: <https://www.cbc.ca/news/canada/saskatoon/saskatchewan-incomes-drop-1.4574902>, archived: <https://perma.cc/F6BB-M3XK>.

⁴ Sarah Buhler & Leif Jensen, “Opinion: Legal Aid Should Be Expanded, Not Cut”, Regina Leader-Post (1 August 2018), online: <https://leaderpost.com/opinion/columnists/opinion-legal-aid-should-be-expanded-not-cut>, archived: <https://perma.cc/U7QG-2FTA>.

⁵ Marg Bruineman, "The Right Price: Canadian Lawyer's 2018 Legal Fees Survey Shows Some Bright Spots for Law Firms Despite a Highly Competitive Market" Canadian Lawyer (April 2018) at 25, online (pdf): <https://www.canadianlawyermag.com/staticcontent/AttachedDocs/CL_Apr_18_LegalFeesSurvey.pdf>, archived: <https://perma.cc/EPG5-AF47>.

⁶ The Legal Services Task Team, supra note 1 at i, 1.

⁷ Ibid at ii.

⁸ Ibid at 72-74.

⁹ Ibid at 68-69.

¹⁰ Ibid at 70.

¹¹ Ibid at 78-84.

¹² Cristin Schmitz, “Chief Justice Wagner Improves Public Communication, Brings New Ideas, Change to Top Court, CJC and NJI” (7 February 2019), online: The Lawyer’s Daily <https://www.thelawyersdaily.ca/articles/10165/chief–justice–wagner-improves-public-communication-brings-new-ideas-change-to-top-court-cjc-and-nji>, archived: <https://perma.cc/Z4HR-UYAC>.

¹³ Cristin Schmitz, “Chief Justice’s Remarks Spark Debate Over Mandatory Pro Bono for Lawyers” (21 February 2019), online: The Lawyer’s Daily <https://www.thelawyersdaily.ca/articles/10394/chief-justice-s-remarks-spark-debate-over-mandatory-pro-bono-for-lawyers>, archived: <https://perma.cc/P6TB-XFLK> [Schmitz, “Remarks Spark Debate”].

¹⁴ Kyla Lee, “Opinion: Lawyers Shouldn’t Have to Provide Mandatory Pro Bono Legal Services (10 October 2018), online: Vancouver is Awesome <https://www.vancouverisawesome.com/2018/10/10/lawyers-pro-bono-work>, archived: < https://perma.cc/JG9X-SFKT>.

¹⁵ Schmitz, “Remarks Spark Debate”, supra note 13.

¹⁶ Trevor C W Farrow et al, “Everyday Legal Problems and the Cost of Justice in Canada: Overview Report” (2016) at 9, online (pdf): Canadian Forum on Civil Justice <http://www.cfcj-fcjc.org/sites/default/files/Everyday%20Legal%20Problems% 20and%20the%20Cost%20of%20Justice%20in%20Canada%20-%20Overview%20Report.pdf>, archived: <https://perma.cc/PH7R-E672>.

¹⁷ The Legal Services Task Team, supra note 1 at 5.

¹⁸ Tim Edgar, Arthur Cockfield & Martha O’Brien, eds, Material on Canadian Income Tax, 15th ed (Toronto: Carswell, 2015) at 73.

¹⁹ Ibid at 577.