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October 24, 2012

U.S. Legal System at a Crossroads

When Americans think of their justice system, they might envision the heroic small town lawyer, Atticus Finch, in To Kill a Mockingbird. Or Perry Mason. Or the countless other movies, TV series and high school civics textbooks that depict the U.S. justice system as a pillar of American society.

Unfortunately, this glorified image is at odds with today’s reality. In too many areas, the U.S. justice system is becoming less a means for delivering justice and more a profit center for outside parties – less Atticus Finch and more Gordon Gekko.

How so? Let’s start with class actions. In an increasing number of cases, lawyers seem to be getting better deals than their clients. For instance, in one proposed settlement with a major internet company, the plaintiffs’ lawyers were awarded $3 million and two non-profit foundations received $6 million. And the 3.6 million class members? They didn’t get a single penny!

Or look at third-party litigation financing (TPLF). This is the practice by which hedge funds and other investment firms finance litigation. In many cases, it turns the justice system on its head by putting lenders, not litigants, in charge of litigation. One only has to look at the role of the funders in the corrupt litigation against Chevron in Ecuador to see the problems posed by this practice.

And then there’s lawyer advertising. I’m sure you’ve seen the endless TV ads for trial lawyers (like this one). It’s now a big business: according to the research firm Kantar Media, total spending on lawyer TV ads is expected to reach more than one billion dollars in 2012, an all-time record. Lawyers have also become adept at advertising for clients online, often under blatantly misleading premises.

In the past, plaintiffs who suffered a wrong would seek a lawyer. But increasingly, it’s the other way around: lawyers are seeking plaintiffs and convincing them they may have suffered a wrong. At a time when small businesses are struggling under the weight of lawsuit abuse, is this really the direction we want to go?

These examples show a justice system that is drifting away from its core principles and into dangerous new areas. By undermining justice and the rule of law, the practices I’ve described erode the principles and values we cherish as Americans. Going forward, we must move the justice system away from the values of Gordon Gekko and back towards those of Atticus Finch.

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