A blawg’s pro bono trial

The Uncivil Litigator is a blog of a mid-level associate whose practice consists mostly of insurance disputes. The insights into his daily practice and the litigation culture, told with appropriate humility, will be interesting for law students and laypeople, but so are the unspoken assumptions behind UCL’s work, which unwittingly demonstrate some of the problems with the legal system.

In particular is a pro bono case taken on behalf of an elderly woman with a $800 dispute over an auto accident, resulting in a jury trial. The nine-post tale, told over several months on the blog, is an entertaining small story in and of itself. But, while he complains about the recalcitrance of the opposing defense attorney, at no point does UCL stop to think that he’s partially responsible for thousands of dollars of societal resources (including seven people are giving up a day of work to sit on a jury) that are going to resolve this dispute. Or that his client, the opposing party, the opposing party’s customers, and society as a whole would’ve been better off if he had spent the time he worked on this case with paying clients, and his firm simply wrote the plaintiff a check for a small fraction of those fees. Pro bono means uncompensated legal services for the public good, but here, as with too many law firm pro bono programs, a law firm imposed a huge externality on the public and an opposing party essentially for the purpose of subsidizing an expensive and inefficient training exercise to get a young lawyer experience. Junior stockbrokers aren’t given $20,000 from the public fisc to churn for practice, but when lawyers do the equivalent, it’s extolled as part of the category of cases where the pro bono lawyer really is working for the public good without pay.

Update: UCL responds, though he confuses a systemic criticism (are there better ways for society to handle small disputes than full-blown trials with all the trappings?) with a personal criticism that wasn’t there.

Another update: Professor Martin Grace initiates a discussion on his weblog.

UCL is missing the point that the insurance company (who I also criticize above) took a hard line because of the current legal system: it knew that it would be unprofitable for the aggrieved plaintiff to sue. Because there is no “loser pays” rule, and because litigation is expensive, the insurance company could profitably take an unreasonable position. (On the other hand, though UCL portrays opposing counsel as unnecessarily antagonizing the jury, the jury still found his client 25% at fault. Perhaps UCL made a counter-offer compromise at some point in the negotiations other than asking for complete capitulation, but if so, it was omitted in the account of the opening negotiation.)

Only in the case where a plaintiffs’ law firm is also willing to behave unprofitably will the insurance company suffer consequences. If the plaintiff fights (and finds someone willing to spend $25,000 of time on her behalf), the insurance company loses $25,000 (though usually less–UCL aggressively litigated the dispute in this particular case with too-clever maneuvers like moving to strike a deposition transcript); if the plaintiff can’t fight, the insurance company saves $800 with the $400 settlement offer. But if 49 times out of 50, the plaintiff takes the settlement offer, the insurance company is way ahead. (Meanwhile, if the law firm fights the settlement offer one time out of fifty, it will quickly go broke.) That’s not an efficient result. That’s not a just result. And it’s not an inevitable result: it’s solely an artifact of current flaws in the system. The ironic result is that litigation is so costly and inefficient that it’s cheaper for the plaintiffs’ law firm to cut a check for the aggrieved plaintiff than to fight on her behalf. That hardly means that I am “encouraging” law firms to cut checks because I’m pointing out the ironies of the larger systemic problem.

Tort reformers are often accused of simply being anti-consumer; there are perhaps some out there for whom this is true. But the flaws in the system are not just the false positives frequently mentioned on this site, but the false negatives that would have affected UCL’s client the vast majority of the time.

If UCL thinks this means I think “that lawlessness should be tolerated,” he’s welcome to that opinion, but it’s not fairly inferred from anything I said. And that characterization of my criticism exemplifies an all-too-common attitude in the legal profession that scorched-earth litigation tactics are a bulwark of, rather than a burden to, society. So does UCL’s remark that he was pleased to punish the insurer by making the case extra expensive for them. Tort reformers need to recognize that some friction in transactions costs are inevitable, but that cuts both ways: there comes a point where the marginal cost of righting every last wrong exceeds the marginal benefit of doing so. Good legal reform reduces those marginal costs, be it by reducing the expense of resolving disputes or by changing legal rules that lead to arbitrary, unjust, and inefficient results.


  • Our good-for-nothing courts?

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    “blue ribbon sm”

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