Misaligned Incentives

Originally published by David Coale.

“Incentive alignment” is a well-known business concept; in law, various types of fee arrangements are often employed to align the financial motivations of lawyer and client. The law is also wary of incentives for injustice, especially when the finances of the justice system become muddled with court procedure. A recent Fifth Circuit opinion joined the list of the clearest examples of such misalignments:

• Tumey v. Ohio, 273 U.S. 510 (1927), which found a due process violation when a “liquor court,” which prosecuted violations of the state Prohibition Act, allowed the mayor to serve as the judge and convict without a jury. If the mayor found the defendant guilty, some of the fine paid would go towards the mayor’s “costs in each case, in addition to his regular salary”; an acquittal, on the other hand, meant no money to the mayor;
• Brown v. Vance, 637 F.2d 272 (5th Cir. 1981), invalidating the statutory fee system for compensating Mississippi justices of the peace because those judges’ compensation depended on the number of cases filed in their courts (thus incentivizing them to rule for plaintiffs in civil cases and the prosecution in criminal ones to encourage more filings); and now
• Caliste v. Cantrell, No. 18-30954 (Aug. 29, 2019), finding a due process violation “[w]hen a defendant has to buy a commercial surety bond, [and] a portion of the bond’s value goes to a fund for judges’ expenses . . . the more often the magistrate requires a secured money bond as a condition of release, the more money the court has to cover expenses.”

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