Municipal extortion and full employment for lawyers

Cite this Article
Michael E. Sykuta, Municipal extortion and full employment for lawyers, Truth on the Market (April 12, 2011),

Consider this a venting, especially as one of the few non-lawyers in our blogging group.

Recently one of my lawyer friends posted a Facebook status as “Amending moving violations and saving clients on their insurance” at the local municipal court. This post reminded me of one of my less-than-enjoyable encounters with the Missouri traffic court system, which got me thinking more generally about this issue and it’s negative social effects. I’m led to believe this may be relatively unique to Missouri, so I welcome comments on to what extent this is the ‘norm’ in other states.

But in Missouri, it is common that municipal prosecutors will regularly “amend” moving traffic violations, which incur points against one’s driver’s license and potentially raise car insurance rates, to non-moving violations which do not incur said points and insurance rate hikes. Of course, the prosecutor only does so under two conditions:

1) The fine for the “amended” violation is exorbitant compared to the moving violation fine–and compared to the usual fine for the actual non-moving violation, and

2) The victim–er, ticketed person–must have hired legal representation for the prosecutor to negotiate the amended complaint. (Non-lawyers, don’t try representing yourself. Prosecutors won’t do it. I tried…once upon a time when I was younger, drove less carefully, less wise, didn’t inhale, etc.)

Now, one may counter that this behavior is not “extortion” because it is not illegal for the prosecutor to negotiate an amended charge as part of a plea bargain, nor is the prosecutor directly benefiting from the extorted fees. However, this activity is a plea bargain only in the most superficial sense, since a miniscule percentage of moving violations are ever actually contested with a not-guilty plea to begin with and individuals engaging in this ‘bargain’ have no intent to contest the moving violation. In a game theoretic, it’s almost never a credible threat so there is virtually no chance court time will be used or the alleged criminal will go unpunished. And while the prosecutor may not directly pocket the huge fines, those fines comprise a non-trivial portion of many municipalities’ revenues, which do flow back in part to the prosecutor’s budget.

And more generally, the definition of extortion includes “an excessive or exorbitant charge” irrespective of legality–and by any relevant measure, the price charged for these amended violations is quite high. Anecdotal evidence suggests 2x to 3x the moving violation fine, which is already significantly higher than what the ‘comparable’ non-moving violation fine would be.

This system is clearly designed (particularly with part 2 above) to increase the coffers of local municipalities while also creating a strong business for lawyers who choose to do such work–often priced (even in billboards and newspaper ads) around $100-$150 a pop, in addition to said fines. (“Tickets from $99” in my local yellow pages.) I don’t begrudge the lawyers who take advantage of this ready-made market opportunity, but this system imposes significant costs that all the rest of us pay.

First, the more obvious: The practice reduces the information content of one’s state driving record, which increases the cost of auto insurance across the board, making it especially difficult for anyone who initially received zero down payment car insurance. By reducing the information content of what is intended to be an objective signal of driving history, the practice increases information asymmetry between auto insurers and drivers. The inability to accurately price an individual’s expected insurance cost means insurers must pool all drivers together. Thus, “safer” drivers (and those better at avoiding detection) end up subsidizing the insurance costs of those drivers who more regularly engage in moving violations.

Second, by reducing the total cost of getting a moving violation, the policy actually encourages more “unsafe” driving. Although the out-of-pocket expense per violation may be high, since the mark up on amended violations approximates the potential increase in insurance costs, the out-of-pocket may be only slightly higher for a few violations and is likely lower for repeat offenders that would otherwise fall into even higher-risk insurance pools. Moreover, the fact that points are never applied to one’s license means the threat of having a license suspended or revoked goes down significantly. Thus the total cost of “unsafe” driving is lowered–which encourages more reckless driving.

Ironically, the Missouri Traffic Lawyers website (which I’m not going to link) touts the public safety dangers of speeding. Perhaps instead we would be better by following Texas and just raising the speed limit.