The role of justice in unlocking economic growth

“The opposite of poverty is justice”  Stevenson 2014

GDP (Gross Domestic Product) does not consider living standards, technological advancement or access to justice when measuring economic growth. But since 1977, economic growth has been defined solely in relation to a country's levels of goods and service production.

Created by Nobel Prize winner Simon Kuznets, GDP was born out of the great depression and manufacturing age. It has become the widely used measure for evaluating economic development. The failings of GDP have become increasingly apparent as economies have evolved past tangible economic gains, like manufacturing levels.

In 2013, the World Bank wrote that:

a lack of access to justice is itself a central dimension of poverty

and defined it as an enabling condition for development by establishing the basic social order and security required for other development activities to proceed. Despite the critical role access to justice plays in allowing citizens to unlock their economic potential, global investment in access to justice at a national and global level has been decreasing for the last 10 years according to the United Nations Development Programme (pdf).

In 2015, world leaders included access to justice in the United Nations Sustainability Development Goals because they recognised justice is essential in all countries for economic growth, human well-being, and development. At least 253 million people living in extreme conditions of injustice, 1.5 billion people unable to resolve their justice problems, and 4.5 billion people overall are being excluded from the opportunities the law provides. According to the United Nations Taskforce on Justice, this creates severe resource pressures on other sectors, namely health, and impacts economic growth.

Legal Aid, Sentencing and Punishments of Offenders Act 2012

Since the introduction of austerity measures in 2008 and the Legal Aid, Sentencing and Punishments of Offenders Act in 2012, economic growth in the UK has been slower than in the preceding decades. Although in 2009 the UK Department for International Development treated justice as a basic or core service on a par with other basic services such as health and education, UK backed investment domestically in access to justice has been significantly reduced over the last decade.  For example, from 2010 – 2011 to 2015 – 2016 Ministry of Justice expenditure to support access to justice was reduced by 34%.

The rule of law provides security and stability

The legal sector has wide-ranging economic impacts, as it has close connections with the institutional architecture of trade, commerce, and the attractiveness of the UK market to attract investment from overseas due to the security the rule of law provides direct foreign investment. A stable institutional set-up, backed by the legal sector, is the key facilitator of economic development through the promotion of more sophisticated economic activity.

The Hague Institute of Innovation and Law (pdf) estimates that just three types of justice problems - lost income, damaged health, and the cost of seeking redress - cost OECD countries between 0.5 and 3 per cent of their annual GDP. In the UK this amounts to between £10.5 - £63 billion per annum.

There is a global movement to reimagine investment from both the standpoint of the money it directly generates and indirectly saves. The UK must conceive of 'revenue' added through both a social and economic lens, where living standards are viewed on par to GDP for their contribution to economic development. The legal services industry and access to justice sector are best placed to advise the government on how access to justice can unlock further economic growth.  

The Law Society has published a research project: Technology, Access to Justice and the Rule of Law investigating:

• the state of play on the uses of innovation and technology in legal practice, the justice system, and in the third sector to make legal services accessible to all
• the barriers for accessibility and adoption in legal practice, particularly those practitioners that advise on the most common areas of law and affect the most vulnerable.

Research in this area will continue.

We are campaigning to protect access to justice by developing and running public campaigns for criminal justice, legal aid deserts and early legal advice. Each campaign has made several asks of government to provide a greater level of support for the access to justice sector.