EDI programme’s research at the Mexico’s labour court helps influence the country’s most significant labour law reform in a century
Fair, transparent, effective, and accountable services that promote access to justice for all is a basic principle for the rule of law. It enables people to have their voices heard, exercise their rights, and hold decision makers accountable. While access to justice is a core state function, many people in low- and middle-income countries struggle with limited access to justice, and often face unpredictable outcomes and slow decisions.
Having an in-depth understanding of and detailed knowledge about the sources of inefficiencies is vital for formulating effective policy reforms, which improve the delivery of public services and lead to better-functioning institutions.
The Oxford Policy Management led Economic Development and Institutions (EDI) programme, funded with UK aid from the UK Government, carried out a field experiment with the Mexico City Labour Court (MCLC) to provide insights into the underlying causes of inefficiencies in the court. The results of the experiment, which was implemented in two phases, have influenced the reforms of the labour law – and passed into law by the Mexican Senate on 1 May 2019.
Exploring the causes of inefficiency
The MCLC receives more than 30,000 filings per year from workers who claim to have been involuntary separated from their jobs and seek severance pay due to them according to the labour law. Historical case data show that case durations are very long, with almost a third of cases entering into their fifth year, plaintiffs are uninformed about the law and contents of their case, and settlement rates are significantly lower compared to other OECD countries. Would better information about the likelihood of case settlement improve labour court performance?
The research team developed initial ideas for a rigorous randomised control trial experiment that they tested in a pilot scheme from March 2016. For 12 weeks, the team provided free information on predicted case outcomes to parties in ongoing cases. They worked together with the implementing government partner, the court, who provided free conciliators, aiming to facilitate settlements between the parties.
Working in one of the subcourts at the MCLC, the team explored how the provision of personalised statistical prediction would impact the settlement rate. On the request of the president of MCLC, the experiment was scaled up to four additional subcourts over the period between October 2016 and March 2017.
EDI funding enabled the researchers to deepen the experiments further between 2017 and 2019 in direct collaboration with the MCLC. This allowed testing the extent to which divergence of incentives between private lawyers and the clients they represent contribute to the dysfunctionality of the courts and sub-optimal outcomes for plaintiffs. The team provided varying the incentives to consult with (free) public lawyers instead and continued providing personalised statistical information on case settlement rates.
The experiments produced significantly higher settlement rates, particularly in cases where the plaintiff was present at the hearing, which in turn helped the court reduce the case backlog. Moreover, the provision of statistical information on settlement rates reduced the overall likelihood of seeking legal representation. This may mean that a main incentive for individuals who have been fired is to receive information about their legal rights and help decide what to do, rather than strictly speaking seeking legal representation. Therefore, our treatments are at least in part a substitute for public lawyers’ help. It demonstrates that readily available information has a direct benefit. Ongoing evaluations will determine the quality of conciliation and how it related to the public vs. private informal and against private formal division of lawyers.
Following the impact of the EDI team’s field work, the MCLC is in the process of setting up permanent information booths. These will be run by paralegals, trained by the EDI team, to continue providing free information to the workers arriving at the court.
The Mexican Government has recognised the positive impact additional information has on conciliation rates and welfare of workers, and has committed to setting up new institutions to implement the compulsory conciliation stage. This will start as early as next year in some Mexican states, before being rolled out across the country.
The EDI team’s work on prejudicial and judicial conciliation, in combination with statistical information, was crucial for informing the new labour law. In particular, the EDI researcher Joyce Sadka helped to design rules relating to mandatory conciliation procedure, sanctions on fraudulent actions in labour proceedings, and enforcement procedures. These directly influenced several articles of Mexico’s new labour law.
Following this ground breaking achievement, the researchers will continue working under future research projects on setting up and testing a new scheme of notifications, introduced by the new labour law.