EXPLORING THE FUTURE OF COURT COLLECTIONS

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EXPLORING THE FUTURE OF COURT COLLECTIONS
Public Private Sector Approaches Jim
Lehman Texas Office of Court Administration
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Texas Office of Court Administration

• State Agency
• Created in 1977
• Chief Justice - Texas Supreme Court
• Provides Administrative Technical Support
• Serves Approximately 2,600 Courts in the State
• [phone]

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Four-Part Presentation

• The Concept of Change
• General Attitudes About Court Collections
• The Importance of Court Collections
• The Real Issue

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In Order to Grow We Must Make A Conscious
Decision to CHANGE!
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Change is often not easily embraced but is
almost always inevitable.

• ATTITUDE
• KNOWLEDGE
• TIME
• HAM FACTOR

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How Important Is Court Collections, and Why?
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General Attitudes About Court Collections

• Court Philosophy
• These people cant pay and its not my job.
• Community Perception
• They dont expect us to pay and nobody cares.
• Government
• We dont have the time or money to invest.

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COMMON SIDE-EFFECTS

• Low Priority - Expectations
• Perception - Inconsistent
• High Default Rate
• Expensive Often Ineffective
• Expensive Ineffective

• Presumption - Cant Pay
• Randomly Set Terms
• Weak Follow-Up
• Warrant As Solution
• Credit/Recycle

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Case Study No.1
State of Texas vs Joe Truitt Joe Truitt and his
wife Jodie shared a textbook history of domestic
violence black eyes, broken bones, and broken
promises. Joe already had served three years
probation for pulling a gun on his older sister.
He had spent time in jail for two misdemeanor
assaults against his wife, and another two cases
were pending. Once, in a fit of rage, Jodie
says, he pushed her from a speeding car. Joe has
pled guilty to a third assault charge. He broke
Jodies jaw. The maximum fine is 10,000.00.
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QUESTIONS
1. As the judge, would you impose the maximum
fine? 2. If the maximum fine is imposed, can Joe
pay it? 3. If less than the maximum is imposed,
why?
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Case Study No. 2

• Out-of-Towner (sayCalifornia)
• 3rd Grade Ed
• Age 65-70
• Unemployed
• Lives w/Relatives
• Owes 5K

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Criminals Crime
CRIMINAL 1 one who has committed a
crime CRIME 1 an act or the commission of an
act that is forbidden or the omission of a duty
that is commanded by a public law and that makes
the offender liable to punishment by that law.
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Criminals

• There are approximately 1.3 Million (or less than
  ½ of 1 of the national population) adult prison
  inmates in the U.S.
• In 2003 (latest year with available data) there
  were 20.5 Million new criminal cases filed in
  U.S.
• 59 of all prison inmates have a high school
  diploma or equivalent.
• Two-thirds of all prison inmates were employed
  the month before they were arrested for their
  current offense.

Bureau of Justice Statistics
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Show Me The Money!

• Housing.28
• Transportation...24
• Food..19
• Clothing..5
• Medical...5
• Insurance.5
• Other/Discretionary14

American Collectors Association
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Discretionary Dollars

• It is estimated U.S. courts assessed
  approximately 18.3 billion in court costs, fees,
  and fines in 2005 or about 65 for every person
  in the Nation.
• In 2005, gross lottery ticket sales reported for
  the United States was approximately 52 billion
  or about 187 for every person in the Nation.

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Discretionary Dollars

• It is estimated that in FY 2005, the average per
  case assessment for Texas courts was
  approximately 173.
• A study of state lotteries found that lottery
  players with incomes below 10,000 spend an
  estimated 597 per year playing the lottery.
• The same study found that lottery players with
  incomes between 50,000 and 100,000 spend an
  estimated 225 per year playing the lottery.

NASPL
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Analyzing the Problem
Embedded Barriers

• Denial of the Issue
• Denial of Responsibility/Ownership
• Belief that There is No Solution

Practical Diagnosis
Historically there has never been an accounts
receivable mechanism in place in the judicial
process.
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Principals of Understanding

• A fine is punishment and not a BILL.
• The payment is the defendants responsibility.
• It is expected that the defendant must sacrifice
  to pay.
• The defendant must give payment the highest
  priority.
• The defendant must expect consequences if payment
  is not made.
• The defendant needs to understand the
  consequences.
• The payment is a Court Order, a sentence which
  may not be convenient.
• A court is not where people prefer to spend
  money.
• But, many people come to court with money.

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OPERATING CYCLE
CASH
Private Sector
ACCTS REC
INVENTORY
SALES
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Private Sector Characteristics

• Purpose well-defined
• Clear line of responsibility/accountability
• Significant investment in quality staffing
• Significant investment in strategy/planning
• Creativity is encouraged

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Every Day A Debt Remains Uncollected the
Likelihood It Will Remain Uncollected Increases.
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DEVALUATION The Incredible Shrinking Dollars.
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Private SectorCollection Targets

• ACA 90
• DB 85
• MED 70-80

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Private Sector Account Management

• Current - 30 Days
• 31 - 60 Days
• 61 - 120 Days
• 120 Days Plus

• 85 Collected
• 10 Collected
• 3 Collected
• 2 Collected -
• Charge Off/Write Off

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Collection Focus
Front End
Private Sector
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JUSTICE CYCLE
Public Sector
LAW
CRIME
ENFORCEMENT
PENALTY
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Public Sector Characteristics

• Purpose often generic, general, broad
• Lines of responsibility/accountability often
  vague and/or overlapping
• Staffing often limited by resources politics
• Strategy/planning often short range stop gap
• Maintaining the status quo is the norm

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OFTEN NO CONSIDERATION OF
RISK
DEPRECIATION
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Public SectorCollection Targets

• 50 - 60???

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Court Case Management

• Current - 60 Days
• 60 - 180 Days
• 180 Days plus

• 25 Collected
• 65 Collected - Warrant
• 10 Collected

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Collection Focus
Public Sector
Back End
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• GREATEST SIMILARITY
• Both provide goods and services.

GREATEST DIFFERENCE One is driven by profit,
one is driven by politics.
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Collections Matrix
Private Sector Focus
Public Sector Focus
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Courts Collectors
Court Administrators Court Clerks Probation
Officers Pre-trial Staff Marshals Sheriffs Constab
les Warrant Officers Bailiffs Whoever
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The Impact of Unpaid Fines

• Loss of Public Revenues
• Decrease In Services
• Increase in Taxes
• Weaker Government

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THE ISSUE

• Lack of compliance in paying court fines and
  fees denies a jurisdiction revenue and, more
  important, calls into question the authority and
  effectiveness of the court and the justice
  system.