Res ipsa loquitur
Occasionally,
Finland gets international publicity for its traffic laws in which the
fines for speeding violations are computed as a fraction of the
violator's income. So when some dot-com millionaire gets a lead foot on
the gas pedal and gets a huge fine and it's a slow news day, this event
is news all over the world.
However, I would certainly like to point out to Americans that if they find this practive of determining the speeding fines to be an injustice, they should perhaps first take a closer look at their own civil law system and there especially the punitive damages, whose size is determined solely on the size of the wallet of the defendant. Even worse, these punitive damages are paid to the plaintiff and his attorney, creating a truly perverse system of incentives for the ever-increasing population of lawyers to parasite on the shoulders of the rest of the society. When we think about these incentives, it is no wonder at all why USA currently has about half of all the lawyers in the world, and its best young minds go to law schools instead of doing something productive in science, engineering or medicine. (Of course, the general lack of math and science skills might also play a role here.)
When I was younger, I didn't quite understand why lawyers were supposed to be so hated. Even if they were weasels, they were so by necessity because whenever people say that they need "a good lawyer", they don't mean that they need an exceptionally honest and moral lawyer, but they want somebody who will win the case any way they can. Lawyers have their uses in which they actually create value, as anybody who has brought a house knows. However, as I later learned more and read a few books such as the excellent and eye-opening tome "The Excuse Factory" by Walter Olson, I now understand a lot better why Americans hate lawyers so viciously. I am not a legal expert so I can't tell how much of this book is hyperbole, exaggeration or leaving out essential details of the outrageous example cases, but even if half of this book is true, I can't help but wonder why Americans have not strung up their lawyers from the lampposts en masse. When the lawyers get to set the rules of justice, they will naturally rig these rules in a way that guarantees them maximum future employment and allows them to extract lucrative awards from other sectors of society who get no say in setting these rules. No other profession gets to do the same.
Olson's book concentrates mostly on the legal issues of employers hiring and firing people. It makes an interesting observation that during the past fifty years or so, marriage and employment have switched places in the American legal system so that the former used to be hard to get out of whereas employment was totally at will so that you could just fire anybody on the spot, these days marriage is trivial to get out of whereas firing people is next to impossible, especially if they belong to any of the numerous "protected" groups.
The book begins with the discussion of the famous Exxon Valdez oil spill in which the oil company had to pay five billion dollars in punitive damages. What wasn't mentioned in public and was news to me when I read this book was that before this incident, Exxon had a strict internal policy of getting rid of alcoholic and drug-addicted workers and keeping them away from the positions of responsibility, but the company had to give it up because civil courts had decided that this is illegal discrimination and made them pay massive compensation for it. Unless the company could prove that the currently dry alcoholic will not start drinking again (and how exactly would one go on to prove that?), it is not allowed to treat him differently in any way than it treats anybody else.
In America, if you are an employer, you are damned if you do and damned if you don't. If you are an employer who is contacted about a reference of somebody who used to work for you, you similary face a serious paradox. If you say (or even worse, express in writing) anything that can be implicitly interpreted as negative, you can face a trial unless you can prove and document everything that you said in an airtight manner. On the other hand, if you do not warn the other employer about your bad employee, you can be sued for that too, should that guy screw up later. We should also remember that in American civil trials the defendant doesn't have anything even near the presumption of innocence and other protections than he has in criminal trials, and the burden of proof for the plaintiff is significantly lower.
An interesting lesson in this book for me was to learn about regulatory law, that is, government agencies setting up vaguely defined and mutually contradictory regulations that have provided lawyers an absolute field day. The book especially discusses at length the 1990 Americans with Disabilities Act, a politically correct horrorshow which probably originally had good intentions but later turned surreal when lawyers started abusing it by deciding that this law protects not only the blind, the wheelchair-bound and other such groups traditionally considered "disabled" against discrimination, but also the violent mentally ill and drug users. When you can't fire a schizophrenic you made the mistake of hiring but have to wait until he snaps, you will then face a trial for the victims of his screwup and pay punitive damages for being an evil corporation who put a known nutcase in a position of responsibility. It must be a great job if you can get it for these weasels to take people to court, since they get to keep one third of the damages awarded, and most cases are settled so that they never actually go to court.
Of course, also the traditional groups of disabled people have become more skilled in finding loopholes in the system. If the job description doesn't explicitly say out loud some detail about the job that should be perfectly commonsense, the employer has to arrange the workplace so that, for example, a worker who is allergic to paper dust gets to work in an office that doesn't have any paper, and shoulder all costs for this. And it's probably useless to even mention at this point that the employers have no right to ask and the job applicants have no duty to inform the employer about the special arrangements that they will need during the job application process, because otherwise the employers could discriminate against them.
And God help an employer who uses written exams to select the people they hire among a large number of applicants. It is no longer possible in practice to use such written exams, because if the exam contains even one question that the employer cannot prove in an airtight manner to be absolutely necessary in measuring and predicting future job competence, this gives the losing applicants a chance to go to court, especially if they belong to certain protected minorities who do worse in this exam than average. For this reason, as Steve Sailer as often pointed out, employers have had to outsource the task of measuring and ranking applicant to universities, which is why jobs that previously required a high school degree (if even that) now tend to require a college degree. Then again, it's not like the universities these days are really able to do any kind of ranking based on talent and intelligence, thus giving us college graduates who can barely read and don't know when the World War II took place. It is no wonder why so many jobs these days are temporary so that firms rent temp workers from large temp agencies. (My wife works for one of these agencies.)
The most amusing parts of the book were certainly those that quoted guidebooks and pamphlets written by lawyers who advice people to sue, sue and sue (I wonder what possible incentive would lawyers have to encourage this) and provide them tips and hints of various things that they can do beforehand to ensure that the opposite side will look maximally bad so that they will maximize the awards. The chapters about sexual harassment were also similarly educational, since according to this book, 95% of the sexual harassment cases are not about some boss making lewd suggestions to an underling, but these cases are about general and fuzzy "hostile work environment". Of course, this vague concept has never been really defined but has been kept intentionally fuzzy so that lawyers would have more work cut out for them.
I finished yesterday reading Catherine Crier's similar book "The Case Against Lawyers". This book is essentially a liberal version of Olson's book (for example, this book comes strongly against drug war and mandatory minimums in sentencing, and considers white-collar crime to be a more serious problem than underclass street crime), and it actually mentions Olson's book in a few places. The cures that this book proposes are easy to agree with: for example, eliminating contingency fees and forcing the losing plaintiff pay all the costs of the defendant's side --- and as Marc Perkel once proposed, double this in case of a frivolous lawsuit and make it so that the plaintiff's lawyer is responsible for paying this. One obvious immediate change to the system would be to eliminate punitive damages, or at least change the system so that these damages are not paid to the plaintiff and his lawyers, who don't deserve that money any more than anybody else.
Steve Dutch's hope that he will see a Supreme Court that is as activist for the middle class as the Warren court was for criminals and sociopaths, expressed in his essay "Some Issues Where Conservatives Are Missing The Boat", would also sound like an interesting idea.
However, I would certainly like to point out to Americans that if they find this practive of determining the speeding fines to be an injustice, they should perhaps first take a closer look at their own civil law system and there especially the punitive damages, whose size is determined solely on the size of the wallet of the defendant. Even worse, these punitive damages are paid to the plaintiff and his attorney, creating a truly perverse system of incentives for the ever-increasing population of lawyers to parasite on the shoulders of the rest of the society. When we think about these incentives, it is no wonder at all why USA currently has about half of all the lawyers in the world, and its best young minds go to law schools instead of doing something productive in science, engineering or medicine. (Of course, the general lack of math and science skills might also play a role here.)
When I was younger, I didn't quite understand why lawyers were supposed to be so hated. Even if they were weasels, they were so by necessity because whenever people say that they need "a good lawyer", they don't mean that they need an exceptionally honest and moral lawyer, but they want somebody who will win the case any way they can. Lawyers have their uses in which they actually create value, as anybody who has brought a house knows. However, as I later learned more and read a few books such as the excellent and eye-opening tome "The Excuse Factory" by Walter Olson, I now understand a lot better why Americans hate lawyers so viciously. I am not a legal expert so I can't tell how much of this book is hyperbole, exaggeration or leaving out essential details of the outrageous example cases, but even if half of this book is true, I can't help but wonder why Americans have not strung up their lawyers from the lampposts en masse. When the lawyers get to set the rules of justice, they will naturally rig these rules in a way that guarantees them maximum future employment and allows them to extract lucrative awards from other sectors of society who get no say in setting these rules. No other profession gets to do the same.
Olson's book concentrates mostly on the legal issues of employers hiring and firing people. It makes an interesting observation that during the past fifty years or so, marriage and employment have switched places in the American legal system so that the former used to be hard to get out of whereas employment was totally at will so that you could just fire anybody on the spot, these days marriage is trivial to get out of whereas firing people is next to impossible, especially if they belong to any of the numerous "protected" groups.
The book begins with the discussion of the famous Exxon Valdez oil spill in which the oil company had to pay five billion dollars in punitive damages. What wasn't mentioned in public and was news to me when I read this book was that before this incident, Exxon had a strict internal policy of getting rid of alcoholic and drug-addicted workers and keeping them away from the positions of responsibility, but the company had to give it up because civil courts had decided that this is illegal discrimination and made them pay massive compensation for it. Unless the company could prove that the currently dry alcoholic will not start drinking again (and how exactly would one go on to prove that?), it is not allowed to treat him differently in any way than it treats anybody else.
In America, if you are an employer, you are damned if you do and damned if you don't. If you are an employer who is contacted about a reference of somebody who used to work for you, you similary face a serious paradox. If you say (or even worse, express in writing) anything that can be implicitly interpreted as negative, you can face a trial unless you can prove and document everything that you said in an airtight manner. On the other hand, if you do not warn the other employer about your bad employee, you can be sued for that too, should that guy screw up later. We should also remember that in American civil trials the defendant doesn't have anything even near the presumption of innocence and other protections than he has in criminal trials, and the burden of proof for the plaintiff is significantly lower.
An interesting lesson in this book for me was to learn about regulatory law, that is, government agencies setting up vaguely defined and mutually contradictory regulations that have provided lawyers an absolute field day. The book especially discusses at length the 1990 Americans with Disabilities Act, a politically correct horrorshow which probably originally had good intentions but later turned surreal when lawyers started abusing it by deciding that this law protects not only the blind, the wheelchair-bound and other such groups traditionally considered "disabled" against discrimination, but also the violent mentally ill and drug users. When you can't fire a schizophrenic you made the mistake of hiring but have to wait until he snaps, you will then face a trial for the victims of his screwup and pay punitive damages for being an evil corporation who put a known nutcase in a position of responsibility. It must be a great job if you can get it for these weasels to take people to court, since they get to keep one third of the damages awarded, and most cases are settled so that they never actually go to court.
Of course, also the traditional groups of disabled people have become more skilled in finding loopholes in the system. If the job description doesn't explicitly say out loud some detail about the job that should be perfectly commonsense, the employer has to arrange the workplace so that, for example, a worker who is allergic to paper dust gets to work in an office that doesn't have any paper, and shoulder all costs for this. And it's probably useless to even mention at this point that the employers have no right to ask and the job applicants have no duty to inform the employer about the special arrangements that they will need during the job application process, because otherwise the employers could discriminate against them.
And God help an employer who uses written exams to select the people they hire among a large number of applicants. It is no longer possible in practice to use such written exams, because if the exam contains even one question that the employer cannot prove in an airtight manner to be absolutely necessary in measuring and predicting future job competence, this gives the losing applicants a chance to go to court, especially if they belong to certain protected minorities who do worse in this exam than average. For this reason, as Steve Sailer as often pointed out, employers have had to outsource the task of measuring and ranking applicant to universities, which is why jobs that previously required a high school degree (if even that) now tend to require a college degree. Then again, it's not like the universities these days are really able to do any kind of ranking based on talent and intelligence, thus giving us college graduates who can barely read and don't know when the World War II took place. It is no wonder why so many jobs these days are temporary so that firms rent temp workers from large temp agencies. (My wife works for one of these agencies.)
The most amusing parts of the book were certainly those that quoted guidebooks and pamphlets written by lawyers who advice people to sue, sue and sue (I wonder what possible incentive would lawyers have to encourage this) and provide them tips and hints of various things that they can do beforehand to ensure that the opposite side will look maximally bad so that they will maximize the awards. The chapters about sexual harassment were also similarly educational, since according to this book, 95% of the sexual harassment cases are not about some boss making lewd suggestions to an underling, but these cases are about general and fuzzy "hostile work environment". Of course, this vague concept has never been really defined but has been kept intentionally fuzzy so that lawyers would have more work cut out for them.
I finished yesterday reading Catherine Crier's similar book "The Case Against Lawyers". This book is essentially a liberal version of Olson's book (for example, this book comes strongly against drug war and mandatory minimums in sentencing, and considers white-collar crime to be a more serious problem than underclass street crime), and it actually mentions Olson's book in a few places. The cures that this book proposes are easy to agree with: for example, eliminating contingency fees and forcing the losing plaintiff pay all the costs of the defendant's side --- and as Marc Perkel once proposed, double this in case of a frivolous lawsuit and make it so that the plaintiff's lawyer is responsible for paying this. One obvious immediate change to the system would be to eliminate punitive damages, or at least change the system so that these damages are not paid to the plaintiff and his lawyers, who don't deserve that money any more than anybody else.
Steve Dutch's hope that he will see a Supreme Court that is as activist for the middle class as the Warren court was for criminals and sociopaths, expressed in his essay "Some Issues Where Conservatives Are Missing The Boat", would also sound like an interesting idea.
I'd like the Supreme Court to declare that the right to privacy extends beyond abortion to my financial records, that immunity to unreasonable search applies not only prohibits the police from invading the homes of drug dealers, but to extends to regulatory bodies invading the premises of businesses, that right to free counsel applies just as much to a homeowner facing a frivolous lawsuit as it does a petty crook like Gideon.
Tort reform is also well overdue in America. Steve Dutch also comments that topic in his essay "A Revealing Comment on Tort Reform" by noting that
Is it just me, or does it seem a lot of the people who attack tort reform have made sure to guarantee their own immunity? Newspapers can't be sued for damages unless they are openly libelous. Judges can't be sued for their actions on the bench, activists can't be sued for the effects of changes they endorse, lawyers can't be sued for taking a frivolous case. (The exceptions are so rare and the conditions so stringent they are all but nonexistent.) I can't think of any reason for granting a judge, a lawyer, or a reporter immunity that doesn't apply with equal force to a teacher, a plumber, or a truck driver. If you're inclined to say that judges, reporters and attorneys would be extremely vulnerable by virtue of what they do, my response is nobody was ever forced to be a judge, reporter, or attorney.
It would truly be poetic justice if lawyers were themselves subjected to the same arbitrary and unpredictable rules that they subject everybody else.
The Finnish system of making fines proportional to the offender's income is actually the only sane one. If two people commit the same crime under the same circumstances, their punishments should be equally severe. Now, does anybody believe that a fine of $10,000 dollars would constitute an equally severe punishment for Bill Gates and, say, the average Wal-Mart employee?
Posted by The Monster from Polaris | 12:48 PM
In the US the ADA is why many multiplex theaters are so crappily small. Ed Epstein writes:
"[the ADA] requires that theaters with more than 300 seats provide wheelchair access to all the seats. Providing such access requires about one-third more space for the necessary ramps--space that cannot be filled with revenue-generating seats. To save themselves this expense, theater owners usually do not build auditoriums that have more than 300 seats."
http://www.edwardjayepstein.com/multiplex.htm
The issue of theater size has greater implications than just the experience of watching a movie, as having few medium sized theaters likely has affected what types of movies are made.
Now that I think about it stupid antitrust rulings preventing studios from owning their own movie theaters as being 'monopolistic' are another way lawyers have probably made movies worse too.
Posted by C. Van Carter | 2:49 PM
>I can't help but wonder why Americans have not strung up their lawyers from the lampposts en masse.
You could get sued on that.
Posted by Anonymous | 3:11 PM
I can't help but wonder why Americans have not strung up their lawyers from the lampposts en masse.
That would be such an eyesore. Also, think of the stench!
Posted by beenaround | 3:20 PM
When will you be receiving your award at the Judicial Hellholes Dinner?
I think you were operating on only two volts when you wrote this piece.
Maybe you have been fortunate enough not to have been the victim of reckless, wilful or intentional corporate acts that have caused injury. Punitive damages, therefore, seem unnecessary and even unfair to you.
Some of my clients, however, have been destroyed by acts so far outside the accepted norms for our society that punitive damages are fully justified. The real battle is to get a judge to allow a jury to consider awarding them.
Posted by Greedy Trial Lawyer | 5:13 AM
The Finnish system is definately not "the only sane one". It might not even be sane to begin with. Or would you think that losing for example one month's salary would be an equally severe punishment for Bill and the Wal-Mart employee?
Posted by /mek | 10:03 AM
Iff I remember right, your father is a lawyer?
Posted by Anonymous | 2:02 PM
Iff I remember right, your father is a lawyer?
Iff you don't understand the difference between the Finnish legal system and the perverse incentive aspects of the American civil law that were discussed in the books referred in this post, I really can't help you.
Posted by Ilkka Kokkarinen | 5:31 PM
Yes.
Posted by Anonymous | 2:38 PM
Greedy Trial Lawyer:
"Some of my clients, however, have been destroyed by acts so far outside the accepted norms for our society that punitive damages are fully justified."
No, if they have ben so destroyed, then ACTUAL damages are justified.
PUNITIVE damages going to the plaintiff are NEVER JUSTIFIED AT ALL.
There is inded a strong case that punitive damages should be levied - but there is an even stronger case that the money SHOULD NOT GO to the plaintiffs, as it creates perverse incentives.
End of story.
Your argument was basically that the damages received aren't fully compensatory... OK, make that argumeent, and get larger compensatory damages. PUNITIVE damages aren't a cure for that problem.
Punitives are the most abused part of our legal system, as there is no benchmark by which to judge them.
Another part of the problem (and perhaps you are alluding to this) is that the "compensatory" damages often are insufficient... after the lawyer has taken his cut.
The INSANELY easy solution to this problem is "loser pays" - that is, the loser pays, IN ADDITION to compensatory damages, all court fes (including lawyers), as, really, that's another damage that needs to be compensated (the cost of going to court).
Posted by Deoxy | 11:25 AM
>>"[the ADA] requires that theaters with more than 300 seats provide wheelchair access to all the seats. Providing such access requires about one-third more space for the necessary ramps--space that cannot be filled with revenue-generating seats. To save themselves this expense, theater owners usually do not build auditoriums that have more than 300 seats."
Much like the astonishing proliferation of 199-foot-tall towers after towers taller than 200 feet were required to have flashing lights.
Posted by Anonymous | 6:30 PM