Evolution of Court Collections
Across the nation, attitudes and practices regarding court collection programs are changing. The National Center for State Courts (NCSC) has updated CourTools Measure 7 (Legal Financial Obligations) to include surveys with litigants, judges, and court staff to ensure that the system for collecting financial obligations is fair and respectful. Courts are shifting their focus from revenue collection to the need for litigant reengagement and compliance.
Past processes focused on penalties, which created more problems for litigants. Court policies that set down payment amounts or minimum monthly payments “in stone” stymied low-income litigants from complying. High payment requirements saw some litigants walking away from the court without a payment agreement in place, leading to defaults, issuance of warrants, and more court dates, which further continued the cycle of noncompliance and alienation from the court.
Today, courts have a new goal: litigant reengagement and compliance with monetary court orders. This can be achieved by court staff engaging with litigants on workable payment solutions. Processes are now more flexible and take economic realities for litigants into consideration. Some courts no longer require down payments for payment contracts or firm monthly payment minimums. Instead, these courts allow supervisors to approve monthly payments as low as $10. Lower monthly payments allow the court to continue collecting fines and help litigants to comply and work toward resolving their cases.
Impact of Fair Justice Task Force in Arizona
On March 3, 2016, Arizona Chief Justice Scott Bales issued Administrative Order No. 2016-16, which established the Task Force on Fair Justice for All: Court-Ordered Fines, Penalties, Fees, and Pretrial Release Policies. The task force’s final report1 presented 53 recommendations, plus additional educational and training recommendations for the Arizona Judicial Council’s (AJC) consideration.
Regarding collections, the report identified one key principle: Convenient payment options and reasonable time payment plans should be provided and based on a defendant’s ability to pay.2 People of all income levels may commit a violation of the law. If justice is to be administered fairly, the justice system must consider the challenges that court-ordered sanctions pose for those living in poverty or otherwise struggling economically. Court practices should help people comply with their court-imposed obligations. Setting a time payment plan amount beyond a low-income person’s ability to pay may result in setting the person up to fail.
Arizona’s Early Compliance Initiatives: Lessons Learned
The Arizona Supreme Court’s Fines, Fees, and Restitution Enforcement Program (FARE) began in 2003 in response to a financial crisis experienced in Arizona. A state general fund deficit created a large reduction in the amount of funds appropriated to the Arizona Judicial Branch. In response, the Arizona Administrative Office of the Courts (AOC) mandated an examination of funding priorities and implementation of programs to improve the enforcement of court financial orders. FARE provided courts the ability to assign outstanding debt to a centralized collections program.
FARE was developed as a public/private partnership between the AOC, the Arizona Motor Vehicle Division (MVD), the Arizona Department of Revenue (DOR), and a private collections vendor. Concurrently, all courts were mandated to participate in the statewide Debt Setoff Program (DSO), which intercepts state tax refunds and lottery winnings to pay outstanding debt to state agencies.
Currently, 177 courts participate in FARE. Since the inception of the program in 2003, FARE has collected over $724 million as of June 2019. Over the years, FARE implemented additional compliance tools, such as:
- the Traffic Ticket Enforcement Assistance Program (TTEAP), which provides an interface between the courts and MVD and requires financial sanctions to be paid before vehicle registration can be renewed;
- a multistep defendant notification process, including four collection notices and outbound calls; and
- a Web payment portal (www.azcourtpay.com) and interactive voice response system (IVR) for payments (both have no convenience fees).
Since its inception, FARE’s collection processes remained largely the same. When cases were referred to the FARE program, a $35 delinquency fee was added, as well as a 19 percent special collections fee. The Special Collections Fee revenue is shared by the vendor and the AOC. The fee revenue covers the costs of the program and the collection tools. Credit card fees for online payment, as well as IVR, are covered by the vendor, at no cost to the litigant.
FARE Program’s Response
To incorporate the Fair Justice Task Force recommendations, the FARE Program underwent major changes for the first time in 15 years. The focus of the FARE Program changed from revenue enhancement to litigant reengagement and compliance.
The AOC has a solid partnership with its private FARE vendor. The contract with the vendor was due for an extension, allowing an opportunity to negotiate changes that incorporated policies reflecting the Fair Justice Task Force recommendations. This led to over a year of planning, programming, and implementation across the state. In the negotiation, the vendor agreed to take an annual reduction of revenue of over $1 million.
Once the AOC had an agreement with the vendor, the FARE team presented its recommended changes to several statewide committees and obtained final support from the AJC to update the Supreme Court’s administrative code. A description of the FARE Compliance Assistance Program (FARE CAP) and guidelines were added to the revised code. The FARE delinquency fee was changed to $49 (with $10 going to the vendor), and the special collections fee was changed to 19.5 percent. Part of the new process also delayed the Special Collections Fee assessment until after the issuance of a second collection notice, which gave litigants an additional 45 days to take care of their obligation before the additional fee was imposed (see Figure 1).
The FARE CAP model allows litigants to pay a presumptive down payment of $150 and enter into a reasonable payment agreement. After receipting the down payment, the remaining special collections fee on the case balance is waived. All collection activity ceases and holds on vehicle registration renewals and tax intercepts are removed. Driver’s license holds or restrictions may be released dependent upon court discretion and policies. FARE CAP encourages litigants to reengage with the court and receive a reduction in the amount owed. All cases remain in FARE so that there is no service charge for online payments.
Since the completion of programming in the statewide case management system for Enhanced FARE in September 2018, 20 courts are participating in FARE CAP. Over 5,000 cases have entered the FARE CAP program, almost $1 million has been collected, and over $500,000 of collection fees have been waived. FARE CAP has saved the average litigant over $160 per person/case in collection fees (see Figure 2).
Program Totals Since Inception (August 31, 2018 through July 31, 2019)
|Initial Payments Receipted
|Scheduled Payments Receipted
|Fees Suspended at Entry and Reentry
|Average Initial Payment
Future Services to Enhance Engagement
The AOC is committed to developing and implementing technology-driven projects to increase customers’ access to court information and user-friendly payment options. Several new online services are in the development phase, and the AOC is planning to implement them in the next year:
- Off-site cash payments allow cash-preferred customers a secure and convenient method for paying court financial obligations. The FARE Program vendor has identified a business partner for the off-site cash payment project.
- The Online Payment Agreement Portal for standard and FARE CAP payment agreements will enable customers to establish a payment agreement for eligible cases using a self-directed, online portal. This capability will provide another convenient method for customers to engage with the court to satisfy their outstanding financial obligations. Customers establishing a FARE CAP online payment agreement will receive the same benefits as customers visiting the court in person. This portal will be linked to the monthly automatic payment (MAP) function that automates payments from the customer’s credit or debit card for their agreed-upon monthly payment.
- The second phase of online payment agreements will include an Online Dispute Resolution (ODR) function where defendants who wish to modify their existing payment plan or request a nonstandard payment plan can communicate with court staff through a communication portal. This feature will allow defendants to correspond with court staff without traveling to the court during business hours.
Conclusion and Planning Considerations
Recommendations from the Arizona Supreme Court’s Fair Justice Task Force prompted the FARE Program to broaden its program model for litigant reengagement and compliance. The resulting program enhancements allow litigants to be more productive with their lives, balancing the requirement to satisfy court obligations with the need to use their money for family needs.
Court collections are now more about finding ways to be accessible to defendants, not necessarily only about collecting money. The FARE Program has had to find innovative ways of tracking the success of the program because the focus is no longer solely on revenue generation. Still, the FARE Program team believes these customer-focused initiatives will lead to greater litigant reengagement with the court. Our work so far has been successful because of the effective partnership we have with our local courts and vendor. The vendor is committed to encouraging litigant compliance, despite the agreed-upon reduction in revenue.
Courts should regularly evaluate their collections practices, asking these questions: Are the current practices creating opportunities for compliance? Or are the practices restrictive, creating a cycle of fees and unachievable obligations that hold litigants back? Are courts offering ample opportunities for litigants to become compliant with court orders? Are there ways for payments to be made after hours and on weekends? Younger generations expect to take care of business issues 24/7 and for government agencies to provide more accessible program services. Arizona is striving to meet these expectations by creating solutions that bring fairness to the justice process. We hope that the FARE Program’s recent system improvements may serve as a model for other courts, assisting courts across the nation in their evaluation of practices to find practical solutions for litigants.
ABOUT THE AUTHORS
Candace Atkinson has worked in the court system for over 20 years in Colorado, Florida, and Arizona and has been with the Arizona Administrative Office of the Court (AOC) as a unit manager in the Consolidated Collections Unit since December of 2016.
Laura Ritenour has worked for courts for 18 years in Arizona and Oregon. Since March 2016, She has worked as a business analyst for the Consolidated Collections Unit at the Arizona Administrative Office of the Court (AOC).
- Task Force on Fair Justice for All, Justice for All—Report and Recommendations of the Task Force on Fair Justice for All: Court-Ordered Fines, Penalties, Fees and Pretrial Release Policies, October 2016.
- Id., pp. 15-17.