Posts Tagged ‘freedom of contract’

June 14 roundup

  • Teens in Gardendale, Ala. need a business license to cut grass and it’ll cost a cool $110; it was grown-up lawn servicer who threatened to call town if he saw teen cutting a lawn again [WBMA, UPI]
  • “It Isn’t Just Hamburger Stands That Will Be Shut Down By ADA Lawsuit Filers. My Website And Countless Others Could Be” [Amy Alkon, related Mark Pulliam, L.A. Times, more on web accessibility]
  • Ten years later, recalling when Nebraska state senator Ernie Chambers filed a lawsuit against God [Atlas Obscura, our coverage]
  • 15% of Mumbai’s housing stock lies vacant, and 12% of India’s. Blame state housing mistakes and regulation of tenancy [Alex Tabarrok]
  • “The Progressives Took Away Our Right to Contract. It’s Time to Reclaim It” [Iain Murray, FEE]
  • “In that version, she didn’t do anything wrong — it was the other sexy cop who demanded money.” [Lowering the Bar on Ninth Circuit decision in Santopietro v. Howell, which breaks new ground as the first reported decision to use the phrase “sexy cop.”]

Medical liability: reviving the case for contract

“Typical medical malpractice reform efforts are aimed at lowering costs for physicians, but what if many problems associated with medical malpractice could be handled via contract?” In a new Cato Podcast with interviewer Caleb Brown, I discuss that subject and go on to talk about issues in malpractice reform, including arbitration and the “nod to federalism” in this year’s Republican medical liability proposal in Congress. Related: reasons why Cato adjunct scholar Jeffrey Singer is skeptical of federal reform.

Wisconsin investigates grocery for pricing too low

The idea of minimum price regulations saw its American heyday during the New Deal, where it was a prime component of FDR’s National Recovery Administration. And the 1935 Supreme Court decision striking down the NRA as unconstitutional didn’t affect state laws like the one that has gotten Grand Rapids-based grocery chain Meijer in trouble for allegedly pricing its goods too low [Michigan Live]:

“Wisconsin is among 16 states with minimum markup laws that have price protections for retailers, according to the National Conference of State Legislatures.

“This is a bit peculiar for us, we are not accustomed to regulations that limit our customers’ ability to save money when they shop with us,” Guglielmi said.

More: K. William Watson, Cato (“While state laws like Wisconsin’s Unfair Sales Act are relatively rare, the federal government relies on the same bad economics to justify the U.S. antidumping law, which imposes punitive tariffs on imports sold below ‘fair value.'”).

For real liability reform, try freedom of contract

Six months ago the Delaware Supreme Court upheld the right of an enterprise to include a loser-pays provision in its bylaws, specifying that losing shareholder-litigants would have to contribute reasonable legal fees to compensate what would otherwise be loss to other owners. Since then there’s been a concerted campaign to overturn the ruling, either in the Delaware legislature or if necessary elsewhere. But as I argue in a new Cato post, allowing scope for freedom of contract of this sort is one of the best and most promising ways to avert an ever-rising toll of litigation. Contractually specified alternatives to courtroom wrangling have played a vital role, and are under attack for that very reason, in curbing litigation areas like workplace and consumer arbitration, shrinkwrap and click-through disclaimers of liability, and risk disclaimers at ballparks and elsewhere. (& Stephen Bainbridge).

To the extent America has made progress in recent years in rolling back the extreme litigiousness of earlier years, one main reason has been the courts’ increased willingness to respect the libertarian and classical liberal principle of freedom of contract. Most legal disputes arise between parties with prior dealings, and if they have been left free in those dealings to specify who bears the risks when things go wrong, the result will often be to cut off the need for expensive and open-ended litigation afterward.

More on the Delaware bylaw controversy: D & O Diary (scroll), Andrew Trask on state of the merger class action, WSJ Law Blog first and second, Daniel Fisher, and ABA Journal in June, Alison Frankel/Reuters (forum selection bylaws).

March 23 roundup

  • Tips for those facing vexatious-litigant proceedings [Lowering the Bar; U.K.]
  • Credit card arbitration: “Plaintiffs’ lawyers protect their cartel by bringing antitrust suit” [Ted Frank, PoL]
  • Just what European business needs: gender quotas for corporate boards [Bader, CEI]
  • “Food sovereignty” movement: next, rediscovering freedom of contract? [Alex Beam, Ira Stoll]
  • Much-assailed group for state legislators: “ALEC Enjoys A New Wave of Influence and Criticism” [Alan Greenblatt, Governing]
  • Symposium on David Bernstein’s Rehabilitating Lochner [Law and Liberty, earlier here and here]
  • Because rent control is all about fairness [Damon Root]

Libertarians and medical malpractice

What kind of medical liability market would emerge if courts decided to begin upholding freedom of contract? I take up that question — and explain some of my misgivings about efforts to portray today’s medical malpractice sector as somehow a free-market arrangement — at Cato at Liberty (& welcome Elie Mystal/Above the Law, GruntDoc, Ramesh Ponnuru readers).

Massachusetts: “Innovative Medical Liability Reform”

A new report for the Pioneer Institute by John Biebelhausen (Colorado) and Amy Lischko (Tufts) examines a range of policy options for improving the Massachusetts medical malpractice system, including “less traditional” options such as “contract liability,” a “method for patients to contract directly with doctors or health systems to establish pre-determined rules for compensation in the case of injury due to physician negligence.” [“Innovative Medical Liability Reform: Traditional and Non-Traditional Methods“]

November 30 roundup

  • Sooooo glad to be an American: that’s how Patrick at Popehat feels following latest Canadian-libel-law outrage directed at conservative blogger Ezra Levant (& see comments for alternate view);
  • Obama has pardoned more turkeys than people. Why? [Dan Froomkin, HuffPo]
  • “Reforming medical malpractice liability through contract” [Michael F. Cannon, Cato Institute working paper, PDF]
  • Memoir of jury foreman in criminal case [Tux Life]
  • Not too sharp: Massachusetts school district disavows policy of not letting students bring pencils to school [Slashdot]
  • State governors have big plans for liability reform. Maybe even loser-pays? [Carter at PoL, more; Florida, Indiana, Tennessee, Texas]
  • Parent who sent buzzworthy demand letter to Kansas City school board is a jazz musician [Wayward Blog, earlier]
  • From comic books to violent videogames: “Our puritanical progressives” [George Will]

High Cost of Legal System Justified by “Intangible” Value?

by Guest Blogger Victoria Pynchon

Overlawyered is a natural read for mediators such as myself.  The high cost of litigation. Expensive. Procedurally encrusted and, with electronic discovery, a 21st century e-Bleak House.  Endless legal process for those with the funds to foolishly waste on pre-trial dispositive motions; appeals; returns to the trial court; verdicts; motions for new trials and judgments notwithstanding the verdict, further appeals.  A process that is brutal on the people and an enjoyable though intense board game to the lawyers who participate.  Lawyers for whom winning everything because that’s our job. Win. Not write a brilliant motion.  Not make a cogent closing argument.  Not buy our witnesses $150,000 in new clothes.  All that might be necessary.  But without the  win, pointless.

Having said that — and having personally experienced the case that went to trial only after it was “old enough to drive” (the Stringfellow Insurance Coverage Litigation) — what I am about to say may surprise Overlawyered’s readers.

The rule of law (and the human resources necessary to keep its machinery running) accounts for a full 57% of the wealth of developed nations like ours.

This statistic comes not from the ABA, some self-serving trial lawyers association (i.e., the Plaintiffs’ bar) or a left-leaning academic at an Ivy League University.  No.  This comes from the World Bank!

As ReasonOnline science correspondent Ronald Bailey recounted in The Secrets of Intangible Wealth a little more than a year ago;

Human capital and the value of civil institutions – as measured by the rule of law – constitute not just a part of the economic well-being of nations, but the largest share of wealth in virtually all countries.

The statistics compiled by the World Bank should surprise you as much as they did me:

Once one takes into account all of the world’s natural resources and produced capital, 80% of the wealth of rich countries and 60% of the wealth of poor countries is of this intangible type.  [According to] the World Bank[‘s] economists  . . . .  the rule of law explains 57 percent of countries’ intangible capital. Education accounts for 36 percent.

We need only return to the first principles we were taught in law school — certainty of contracts, for instance — for the following figure to be less than completely astonishing:

the  natural wealth in rich countries like the U.S. is a tiny proportion of their overall wealth—typically 1 percent to 3 percent.

Why?  Because we

derive more value from what [we] have. Cropland, pastures and forests are more valuable in rich countries because they can be combined with other capital like machinery and strong property rights to produce more value.

And the role of the rule of law here?  Predictability — trust in civic, political and financial institutions (cf. the stock market when it’s working productively) — freedom of contract, the internalization of legal precedent for managing disputes that are never litigated, and many more efficiencies made possible by the mere presence of a working justice system in America.

I write this as we experience an unprecedented Presidential campaign, the result of which is uncertain and, to many people, frightening.

All I can say to those filled with fear of a McCain or of Obama presidency, is to remember this — America’s political institutions and the people who elect representatives to serve them are more powerful than any single man (or woman).  Whoever is elected, we retain the power to eject him if he over-reaches.  So let’s get past this ENDLESS campaign and laissez le bon temps roulez!