Former drug addicts should be appointed lay magistrates to sit in specialist courts dealing with substance abuse-related crimes, a think tank said.
Policy Exchange said the experiences of individuals who had turned their lives around could not be put to good use because of a ban on ex-offenders.
Ex-drug addicts could become magistrates after a period of good behaviour, Policy Exchange said
It also called for magistrates to be forced to step down after 10 years in a bid to reduce the average age of a group which remained "overwhelmingly white, middle class and old".
An expansion in the number of "problem solving courts" dealing with drug addiction, alcoholism and mental health would form part of a reform agenda published next month, the think tank said.
They would provide a "personalised approach" for non-violent minor offenders - seeing them regularly to check on compliance with drug treatment, alcohol monitoring and community service requirements.
And allowing ex-addicts who had become "respected role models" by not offending for five years and carrying out voluntary work or other public service to sit in the courts would make them more effective.
Under the present rules, criminal convictions including minor traffic offences are a bar to becoming a lay magistrate, potentially included crimes committed by a would-be candidate's partner.
Among other reform proposals are ending the default of magistrates serving to the age of 70 in favour of a 10-year maximum term to "inject greater innovation and dynamism into the courts system".
Max Chambers, the head of crime and justice at Policy Exchange, said: "Magistrates could be the key to making it happen. They've been the pillars of our communities since their creation 650 years ago, but in today's world whether you're allowed to become a magistrate has got to be about more than whether you move in the same social circles as other magistrates.
"We need to open this system up to those with first-hand experience of what addiction and the criminal justice system are really like.
"Who better to help turn offenders' around and make our streets safer than someone who's been through it, come out the other side and is now making a positive contribution to society?"
He went on: "Even though money is tight, we want to see more courts adopting this innovative approach to dealing with crime.
"Tackling offenders' issues in court and holding them accountable for their progress is about moving from assembly-line justice to problem-solving justice."
The idea received the backing of Matthew Perry - the American former star of sitcom Friends - who has spoken about his own battle with drug and alcohol addiction and supports similar policies in the US.
"The Obama Administration is investing heavily in these court models in the United States because they are proven to work, and we are increasingly seeing the use of former addicts as magistrates and judges in helping to turn people's lives around," he said.
"It's simple - drug courts and sobriety courts save lives and taxpayer dollars, and that's why I'm so committed to seeing more of them get off the ground."
A Ministry of Justice spokesman said it was right to bar people "in whom the public is unlikely to have confidence" from being a magistrate but insisted decisions were made on a case-by-case basis.
"A criminal conviction does not automatically disqualify someone from being appointed as a magistrate, nor does a previous addiction to drugs or alcohol," he said.
"But the public has a right to expect that magistrates will be people of integrity and good character.
"For that very important reason, it will remain the case that anyone in whom the public is unlikely to have confidence will not be appointed to the magistracy."