Access justice is one of the most appealing and least contentious regulatory techniques in law’s repertoire. It aspires to give people equal opportunity to utilize certain primary goods, and it does so by assuring openness—that access to these goods is not allocated by markets and is not tilted in favor of wealth or privilege. But access justice often fails to meet its egalitarian aspirations, because groups that are not the intended targets of the intervention deploy access and its benefits disproportionately. Paradoxically, access justice often benefits various elites while paid for directly by taxpayers and indirectly by weaker groups. This Article brings to light this unintended and regressive cross-subsidy created by policies of access to information, compensation, insurance, accommodations, and more. It then examines in detail a specific contemporary access justice paradox—consumers’ access to courts and the impact of mandatory arbitration agreements that limit such access. This Article demonstrates that access to courts is a franchise of the elite and of little value to weak consumers. Nevertheless, it considers whether contractual waivers of access to courts hurt weak consumers by foreclosing effective access through class-action representatives. This concern has theoretical merit, but it, too, is limited in ways that are often unappreciated.
Equal access is one of the most appealing and least contentious regulatory techniques in law’s repertoire. Equal access aspires to give people even entitlement to certain primary goods or opportunities, and it does so by assuring openness—that access to these entitlements is not allocated by market prices and is not tilted in favor of wealth or privilege. Equal access is often secured by public expenditures that finance free entry for all, but it is also accomplished by mandates requiring providers to charge uniform affordable prices or offer uniform accommodations.
Some of the classic public goods are delivered via the equal access method: education, transportation, and parks. Public schools are open and free, guaranteeing baseline access to education to all citizens. Roads and commuter services stretch out to all communities and are also mostly free to use. And parks and waterfronts are held in the public trust, operated by the community and open to all. Funded by the taxpayers, bolstered occasionally by token usage fees, schools, roads, and parks are equally accessible.
Equal access is also a popular device in protective laws. Protective laws are legal regimes that seek to help weaker groups in society function better, enjoy more opportunity, and reach better outcomes. Laws requiring that people with disabilities be afforded equal access to buildings are a prominent example of this regulatory technique. So are policies and laws that require universal access to some forms of community banking and credit, personal health and property insurance, and necessity goods. Many other protective laws utilize the equal access technique, seeking to guarantee universal access to a variety of goods and services, including information, knowledge, the Internet, medicine, safety, compensation, and courts. These policies are often based on the highly plausible prediction that, in the absence of such mandates of open and equal access, weaker groups would fare worse.
There is a strong and alluring notion of equality underlying various access policies. If these goods and services were subject to market allocations, instead of being accessible to all through government mandates (and funding), the poor and the less sophisticated would be disproportionately priced out. Equal access enables those who could not otherwise afford to pay the true cost of these services to consume the subsidized good. It thus promotes a fundamental element of a liberal society—equal opportunity.
Equal access is alluring also because it is protective but not heavily paternalistic. True, it is more intrusive than some other regulation-lite techniques, such as mandated disclosure or the use of “choice architecture,”1 because it mandates a baseline entitlement and limits opt-out, and thus interferes more aggressively with (and often replaces) private markets. But it is less intrusive than other command-and-control regulatory policies that go beyond the provision of access and mandate the quality or equality of outcomes.
Undoubtedly, some equal access policies have had important effects, helping disadvantaged groups. The days in which only the privileged could obtain education or have access to health care are gone. In fact, it would be difficult to imagine a liberal society without the guarantee of equal access to such core institutions. Many of the accomplishments of equal access are now taken for granted, regarded as the cornerstones of a just and fair society, and rightly so.
But at the frontier of present-day protective law there hover various equal access policies with a more dubious foundation and a less encouraging success record. These are policies that secure free or subsidized access to all, but that some subgroups of people enjoy disproportionately. Paid for by all, but enjoyed by the few, these policies represent a cross-subsidy. This cross-subsidy may be desirable when the beneficiaries are a subgroup of the weak consumers who are the intended target of the redistributive concerns. This, for example, is the result of Medicaid and housing assistance programs. The poor are the primary recipients, and the programs redistribute wealth to reduce overall poverty. But the cross-subsidy is undesirable and unintended when the beneficiaries are the elite and when the benefits are paid for by the less privileged. It is the surprising prevalence of such unintended consequences that this Article exposes.
This question—the differential effect of protective laws among groups of consumers—is not often addressed by legal commentators. It is quite well understood that legal mandates intended to benefit consumers can impose costs that may be passed on to these consumers through higher prices, with adverse distributive consequences. Prior literature provided several criteria to predict the winners and losers from cost pass-ons of mandatory rules.2
But in the area of mandated access, the redistributive effect is rarely studied. Instead, it is often assumed that mandated access policies, even if they come at some cost, are mostly beneficial to the least privileged and most needy among consumers—those whose access might otherwise be denied. Thus, a common response to perceptions of disadvantage and deprivation in consumer and employment markets is to prop up the legal protections. Mandating important transactional rights for consumers or employees is thought to guarantee “access justice.” The weaker parties, who are otherwise “excluded from the market,” would be able to “participate in and reap the benefits of the [market].”3 Similarly, another prominent access concern is “access to knowledge”—shorthand for the right to use and participate in mediums of information and expression.4 In intellectual property law, a “social movement” of access to knowledge views the limitations imposed on users by software vendors or patent holders as unfair, calling for lawmakers to guarantee open access.5 Net neutrality—open access to the Internet—is another logical implication of access to knowledge.6 These access-to-knowledge initiatives are founded on the empirical assumption that the beneficiaries of such protections are otherwise weaker than market participants who desire to restrict (and charge for) access.
I need a term for this paradigm, prevalent across all of law, that favors mandated equal access as a regulatory method. “Access justice” seems direct and descriptive.7 It includes a variety of views across many regulatory areas, and it is therefore a generalization. But it is a useful generalization because so many lawmakers and commentators embrace some version of mandated equal access across a broad array of substantive issues.
It is so commonly assumed that access justice benefits the weak that the premise has escaped any significant scrutiny. Obviously, the belief that access justice is progressive is deeply held among liberals, who rely on it to advocate equal access reforms, such as access to banking for the poor.8 But conservatives too accept the descriptive logic of access justice, even when opposing it on normative grounds. Professor Richard Epstein, for example, explains that strong consumer protections—proposed by the European Union and widely supported by access justice advocates—are likely to benefit weak consumers. Epstein is ready to “assume that the less-sophisticated half of . . . consumers stand to benefit from the [protective] regulation and the more-sophisticated half . . . are hurt by them, in equal degrees.”9 He thus views such access policies as “an implicit cross-subsidy of weak consumers by their stronger counterparts.”10 This is an intuitive assumption that no longer seems to require justification. Surely, mandatory consumer protections that secure access to markets and to core commercial rights greatly benefit weaker consumers who need them more direly. Sophisticated consumers are less reliant on access mandates because they can bargain for them more effectively or pay for access when necessary. Indeed, writing about equality of opportunity—the political ideal that is the foundation of access justice policies—Professor Robert Nozick conceded that such policies were either “directly worsening the situations of those more favored with opportunity” or “improving the situation of those less well-favored.”11
The view that mandated access justice helps the weak is therefore widely shared and rests on highly plausible logic. My goal in this Article is to challenge this view. I argue that in an important range of activity, it is false. It relies on superficial logic that can be debunked, and it is inconsistent with a large body of existing empirical evidence. Rather than helping the weak, access justice policies could be regressive, benefitting stronger consumers disproportionately, at times at the direct expense of the weak. This is the paradox of access justice.
The argument I present is simple. Access justice is merely an equality of opportunity, not of outcome. Some can draw on that opportunity better than others can. If those who take advantage of the open access and opportunity are disproportionately more sophisticated and affluent, the benefit of the program ceases to be progressive. And if the funding of such free programs burdens the poor, the result can be outright regressive.
Consider, for example, free and open access to a parking lot outside the city opera. Only people with cars, and mostly those attending the opera, would benefit from the opportunity. This rules out the poorest, who do not own cars in the first place, as well as anyone else other than opera lovers. When the mayor decides to start charging market prices for parking in the lot, she may be eliminating free and equal access, but she is hardly hurting the poor or working class community. She is merely ending a subsidy that flows from all taxpayers to a small, highly educated, and relatively affluent elite group.12
I present in Part I of this Article a number of important social and legal policies that mirror the opera parking metaphor. I show, for example, that the long-standing federal scheme of subsidized flood insurance, which is commonly justified on grounds of access justice, is in fact a regressive policy, which provides subsidies to the more affluent homeowners at the expense of the generally less affluent taxpayers. The method I use to analyze this and other access justice policies is to identify who are the likely beneficiaries of the access program. Are there implicit “access handicaps”—structural bars to entry—that afflict some populations? Does the afflicted population that fails to realize the benefits of access consist primarily of the poor or other weak sectors? I also ask who pays for the programs that are selectively utilized. Are the costs spread widely on all taxpayers or all broadly defined potential users, thus creating a subsidy from low-value users to high-value users?
In presenting the paradox of access justice, I stop short of making a general claim that access justice policies are doomed to be unfair. As stated at the opening, numerous long-standing access mandates—like public education and public housing—help more and charge less those who can least afford such basic goods. The claim I develop is that access justice is a mixed bag. People often assume that it is enough to enact open access to achieve the desired redistribution. Recognizing the patterns of access handicaps corrects this misperception. I show that the cross-subsidy can go the wrong direction in systematic ways, and I trace this misalignment to various important access justice policies. By showing the recurrent failure of access justice, and the real possibility of a regressive bias, I hope to repudiate its mythic stature as a formula for consumer protection.
After introducing the potential general problem with access justice, the second Part of this Article (Part II) zooms in on one of the most contentious access justice debates of our time—access to courts. The problem of access to courts—sometimes referred to as access to justice13—addresses the legality of predispute arbitration agreements. These agreements are often included in consumer and employment contracts, stipulating that any dispute must be resolved through arbitration procedures, thus barring any access to courts. An important upshot of the denial of access to courts is the shutdown of class actions as a method for vindicating consumers’ and employees’ common complaints.
Here, as in other areas of access justice laws, it is commonly assumed that mandatory arbitration clauses indeed hurt potential plaintiffs. Accordingly, the first step in Part II, after describing the phenomenon of mandatory arbitration agreements, is to show that access to courts is yet another access justice policy that distributes benefits to some more than others. Surveying a large social science literature on access to courts, I present the possibility that access to courts is a privilege disproportionately deployed by sophisticated consumers, and almost never by the poor. In such cases, I argue, the denial of access to courts affects the sophisticated elite more than it affects others. Further, if the costs of lawsuits are spread evenly across all consumers who all pay higher prices, then in effect access to courts is a regressive access justice policy, benefitting the affluent at the expense of others.
Viewed in this light, contracts containing mandatory arbitration clauses eliminate the cross-subsidy. And, conversely, laws that prohibit or strike down such mandatory arbitration clauses restore access to courts but also restore the cross-subsidy. By reinstating the access-to-courts privilege, such laws force all consumers to pay for a benefit enjoyed only by the elite. If I am a poor consumer unlikely to go to court, I do not benefit from access to courts, and I might be worse off for it, by having to pay higher prices.
But there is more. The second step in evaluating access-to-courts laws is to reassess this conclusion in light of the effect of litigation through class actions. Even when initiated only by the sophisticated few, class actions can benefit all consumers, either by securing class-wide redress or by generating incentives for firms to provide safer and better products to all consumers (including nonlitigants). This possibility raises the specter of vicarious access—enjoying the value of access justice not in directly visiting the open forum but in piggybacking on the visitation by others. If this form of access is beneficial for all consumers, mandatory arbitration clauses that eliminate class actions hurt consumers as a group, not merely those with the propensity to sue.
The question whether class actions indeed create vicarious access is empirically open. The last Section of Part II lays out the contrasting conjectures regarding actual dissemination of the benefits of class litigation. It concludes that despite the class-wide effect of access to courts, subtle cross-subsidies may nevertheless afflict this institution. It shows that in a variety of contexts, access to courts—even vicariously—does not benefit large groups of less sophisticated, less affluent consumers.
- 1. See Richard H. Thaler and Cass R. Sunstein, Nudge: Improving Decisions about Health, Wealth, and Happiness 81–100 (Yale 2008).
- 2. See Richard Craswell, Passing On the Costs of Legal Rules: Efficiency and Distribution in Buyer-Seller Relationships, 43 Stan L Rev 361, 372–95 (1991).
- 3. Hans-W. Micklitz, Introduction, in Hans-W. Micklitz, ed, The Many Concepts of Social Justice in European Private Law 3, 5, 36 (Elgar 2011).
- 4. See Access to Knowledge (Information Society Project, 2015), archived at http://perma.cc/J9S4-Z8TG.
- 5. See, for example, Gaëlle Krikorian, Access to Knowledge as a Field of Activism, in Gaëlle Krikorian and Amy Kapczynski, eds, Access to Knowledge in the Age of Intellectual Property 57, 68–74 (Zone 2010).
- 6. See, for example, Charter for Innovation, Creativity and Access to Knowledge (FCForum, 2010), archived at http://perma.cc/GA5U-RRGS; Angele A. Gilroy, Access to Broadband Networks: The Net Neutrality Debate *1 (Congressional Research Service, July 1, 2015), archived at http://perma.cc/SAY7-PUHX.
- 7. For an example of the use of the term “access justice” in the literature, see Micklitz, Introduction at 5 (cited in note 3) (using “access justice” to describe the European Union’s model of social justice).
- 8. See generally, for example, Michael S. Barr, Banking the Poor, 21 Yale J Reg 121 (2004) (arguing for the progressive benefits of increasing low-income families’ access to banking services).
- 9. Richard A. Epstein, Harmonization, Heterogeneity and Regulation: CESL, the Lost Opportunity for Constructive Harmonization, 50 Common Mkt L Rev 207, 213 (2013).
- 10. Id at 213–14.
- 11. Robert Nozick, Anarchy, State, and Utopia 235 (Basic Books 1974).
- 12. See Joni Maya Cherbo and Monnie Peters, American Participation in Opera and Musical Theater—1992 3–6 (Seven Locks 1995) (describing the demographic profile of the 3.3 percent of Americans who saw one or more operas during 1992).
- 13. See, for example, Office for Access to Justice Home (DOJ), archived at http://perma.cc/9JAJ-U4XU.