Litigation is Destroying Companies: Abuse of Legal System is Personification of Greed Run Amok…

Frivolous lawsuits are booming in this county. The U.S. has more costs of litigation per person than any other industrialized nation in the world, and it is crippling the economy. ~Jack Kingston

Litigation is inevitable, and in some cases they are probable warranted, but lawsuits are destroying businesses. It doesn’t take much to tie a company in knots with litigation; and the process saps the soul, dispirits, and it’s very expensive. It seldom results in the sort of triumph everyone imagines when it starts. Legal fees, alone, can be crushing and many litigators fail to gauge the cost to their clients as it relates to the potential benefit.

According to JW Howard, litigators approach lawsuits as fixed structure that should be played out in every way the law allows, irrespective of cost or likelihood of success or even if that means destroying the business. Obsessed people can hijack the U.S. legal system: For example, remember that ridiculous lawsuit that litigated for $67 million from a local ‘dry cleaners shop’ for losing pants. Well, the litigator lost the legal suit, but the damage was done and the lawsuit destroyed the business; all over one pair of pants.

A Roper poll reported in the Wall Street Journal showed that 70% agree that liability suits give lawyers more money than they deserve, and 63% agree that some people start frivolous lawsuits because the awards are so big, and there’s so little to lose. About 70% would limit punitive damage awards. By contrast, survey of lawyers and judges reported by the Wall Street Journal found that only 22% viewed the civil justice system negatively, while 77% blamed the media for clogging the courts and the breakdown of the system.

The fact is lawyers are overwhelming in the U.S.  The U.S. has one lawyer for every 265 persons– about 50% of the world’s attorneys (there are 1,143,358 lawyers in the U.S.). The concern is that some not so ethical lawyers inspire panic to promote litigation, while judges’ efforts to resolve cases all too often have resulted in a perverse incentive– causing more cases and more backlog…

In the articleLitigation is Destroying U.S. Companies by Glenn W. Bailey writes: The U.S. civil justice system is hurting business; business is becoming less competitive and jobs are disappearing. What exists is a ‘lawsuit lottery’ that leads to legalized extortion. Lawyers feed on the ‘entitlement generation’ to create panic over products. Attorneys blame the suppliers of products despite, the fact, that warnings on packages are ignored by workers, unions, and employers.

Lawyers wrongly claim that suppliers are overly concerned about profits, more than they are about people. They preach; taking from rich and giving to poor, yet two-thirds of the money goes to attorneys. Opportunities for large fees drive attorneys to recruit more plaintiffs. Trials feed on limiting the plaintiffs’ responsibility for ignoring posted warnings and the employer’s responsibility for not providing a safe workplace or product.

They focus on the supplier and permit the introduction of irrelevant and inflammatory evidence, resulting in verdicts not related to the extent of the plaintiffs’ injury, but the heat of the lawyer’s rhetoric. This inevitably leads to litigation with cases yielding unpredictable, inequitable and arbitrary results. Juries, confronted with essentially the same facts, have awarded damages ranging from zero to millions of dollars! This ‘lottery’ has motivated lawyers to recruit increasing numbers of unimpaired claimants in order to fuel their fee-feeding frenzy…

In the article “The Five Limits of Litigation” by Michael Lee Hanks writes: In the life of most businesses, it’s inevitable that owners will either sue or be sued at some time. Hopefully, these instances will be few, but they are increasingly the case. It’s important for business to understand what is possible with litigation, it is also important to understand the limits of litigation, for example:

  • Litigation reduces predictability in decision-making. Lawsuits place the outcome of a dispute in the hands of lawyers, and the outcome of litigation is unpredictable at best.
  • Litigation places your fate in the hands of persons not familiar with your problems. Lawyers are the main players and they strive to educate and persuade judges and juries about complex matters that are subject to uncertainty and dispute.
  • Litigation impedes efficient problem solving. Operating an ongoing business through a court procedure, such as receivership or bankruptcy, is hellish.
  • Litigation is extremely expensive. Litigation tends to acquire a destiny of its own. It takes-on a momentum which becomes irreversible and moves toward an unpredictable resolution.
  • Litigation destroys relationships. Litigation destroys the relationship between the plaintiff and defendant. It may also require a considerable effort to collect or enforce a judgment, which increases the intensity of the hostility.

In the article “Business Dispute Resolution: Litigate or Mediate” by Jean D. Sifleet writes: In any business, disputes happen. Getting issues resolved, ASAP, is critical, so that parties can limit costs and minimize disruption to their business. Effective dispute resolution can preserve beneficial business relationships. Going to court to resolve a business dispute is a costly, lengthy, and adversarial process that’s unlikely to produce a satisfactory resolution.

So unless the dispute is eligible for ‘small claims’, you are better off using an ‘alternative to litigation’, such as: Mediation: In mediation, a neutral person(s) helps the parties to define the issues in dispute and facilitate the discussion of possible settlement options. Mediation works when both parties want to resolve the dispute.

Another dispute alternative is Arbitration: Arbitration is a more formal process adopting specific rules, such as; American Arbitration Association, International Arbitration Rules, or Chambers of Commerce. Arbitration is used for international contracts with the rules being less formal than litigation. The merits of the dispute are evaluated by independent people who usually have expertise on the subject matter and the resolution is usually binding.

Still another alternative is writing contract dispute resolution provisions into the contract. However, a contract is worthless unless it’s enforceable, and enforcing contracts through the court system for many businesses is unrealistic due to the expense and delays of the court system.

In the article “Introduction to Online Dispute Resolution for Business” by Colin Rule writes: Disputes are a fact of business life, however, with the Internet and virtual businesses, many companies are facing disputes they’ve never dealt with before. In virtual world, transactions take place globally, 24/7, and often between complete strangers. Statistics show that one to three percent of these transactions will go awry.

The online/Internet dispute is relatively new and it can develop between any person and any firm; business, customers, suppliers, partners, regulators, insurers… Companies that do business online will increasingly get entangled in these kinds of disputes. It is obvious that the existing legal system and redress options that are provided in the physical world are not appropriate for the virtual world.  You can’t merely recreate offline judicial mechanisms online and expect them to work, for example a legal system model using; e-judges making e-rulings enforced by e-police running e-jails… just won’t work.

For business litigation in the virtual world other alternatives are required, ones that provide for ‘online business dispute resolution’. There is a growing movement and a consensus is building for the use of such a process. While there is some debate about the mechanics of the process, there is no debate over whether or not an online solution is the best option for redress of disputes on the Internet.

Many international organizations are calling for such an alternative, and they include; OECD, Hague Conference on Private International Law, United Nations, Trans-Atlantic Consumer Dialogue, Better Business Bureau, U.S. Federal Trade Commission, Department of Commerce, European Union, Association for Conflict Resolution, American Bar Association, American Arbitration Association, Global Business Dialogue on E-Commerce, International Chamber of Commerce…

Abusing the legal system for political, social, or greedy ends is fast becoming the U.S.’s favorite pastime. Billions of dollars, millions of jobs, and the survival of legitimate businesses are at stake. Personal injury lawyers are clogging the courts with frivolous lawsuits and unharmed plaintiffs.

There is growing evidence that some personal injury lawyers have teamed-up with so-called medical experts to manufacture abusive ‘junk lawsuits’ propped up by ‘junk science’. Junk science is questionable or misleading information put forth as medical or scientific fact. ‘Junk science’ is medical or scientific claims that are not supported by fact and not validated by others within the scientific and medical community.

These lawsuits erode the credibility and value of expert witnesses, delay, and dilute justice for those who have legitimate claims. It seems like everyday, we read in the news about abuses of our court system, both serious and wacky, and all have serious costs and business consequences. Personal injury lawyers make a living from inventing new ways to sue deep-pockets.

Some lawsuit schemes are so ridiculous that we find ourselves laughing, but the cost of this kind of lawsuit abuse quickly ceases to be funny. All lawsuits, even unsuccessful ones, cost money and the public foots the bill…

If you are faced with litigation involving a business transaction or any aspect of your business, a lawyer can provide assistance and counsel regarding your jurisdiction, court, and possible legal options for the situation. However, for many disputes a business can avoid a complicated and expensive court battle by using, instead, an alternative dispute resolution (ADR) method.

It’s highly unlikely that you will resolve a business dispute with the legal system and satisfy all parties.