Why Are The Courthouse Doors Closing on Ordinary Americans?

• Posted on: Dec 8 2016

In an article entitled “Why You Won’t Get Your Day in Court” appearing in The New York Review of Books, Judge Jed S. Rakoff of the United States District Court for the Southern District of New York, tried to explain why this is so.

According to Judge Rakoff, there are several reasons for this occurrence. These include: the “cost of hiring a lawyer”; “the increased expense, apart from legal fees, that a litigant must pay to pursue a lawsuit to conclusion”; the “increased unwillingness of lawyers to take a case on a contingent-fee basis when the anticipated monetary award is modest”; “the decline of unions and other institutions that provide their members with free legal representation”; “the imposition of mandatory arbitration”; “judicial hostility to class action suits”; “the increasing diversion of legal disputes to regulatory agencies”; and “in criminal cases, … the … increased risk of a heavy penalty in going to trial.”

Judge Rakoff observed that there are a number of “disturbing trends” that illustrate the consequences of these factors. For example, “as many as two thirds of all individual civil litigants in state trial courts are representing themselves, without a lawyer,” including “people of moderate means” who “cannot afford a lawyer.” As Judge Rakoff noted, this trend has had a negative impact on such litigants because “[i]nividuals not represented by lawyers lose cases at a considerably higher rate than similar individuals who are represented by counsel, … even when the judge tries to compensate for counsel’s absence.”

The inability to afford a lawyer goes beyond simply affording attorney’s fees. It goes to the costs of litigation, which have “proved to be excessively expensive.” As Judge Rakoff observed, these costs “not only place[] impecunious parties at a disadvantage but, again, also discourage[] ordinary people from bringing meritorious lawsuits in the first place.”

Even the contingent-fee arrangement does not adequately cure the problem, according to Judge Rakoff. For starters, “contingent-fee arrangements only benefit those … who are suing rather than being sued.” Under most state rules of professional responsibility, the plaintiff who has a contingent-fee arrangement “is still personally responsible for paying for the costs of the lawsuit,” which “frequently amount to thousands of dollars.” “Most importantly,” said Judge Rakoff, “the time-consuming nature of modern litigation means that most contingent-fee lawyers will simply refuse to take on a case that does not promise an award or settlement of at least several hundred thousand dollars, leaving those tort victims who cannot sue for large amounts unable to have a day in court.”

If the fees and expenses don’t impede access to the courts, then “one-sided contracts” requiring arbitration will, said Judge Rakoff. These agreements, drafted by counsel for employers and the seller of goods and services, require disputes to be decided in arbitration rather than in court. Even though these agreements are rightly called “contracts of adhesion”, “i.e., one-sided contracts imposed on weaker parties who have no realistic ability to negotiate, let alone contest the terms,” they nevertheless have been upheld and enforced by the courts, including the United States Supreme Court.

So, What is the Solution?

Judge Rakoff offered a few suggestions to open the courthouse doors to ordinary Americans.  These solutions, which Judge Rakoff believes will not “come easily”, include legislative responses, “state-sponsored legal insurance”, “a guarantee of counsel to indigent civil litigants” and a “lawyer-subsidized provision of cheaper legal services.” Perhaps the most immediate solutions, said Judge Rakoff, should come from the courts:

But while the larger solutions to this denial of access must await a change in the legislative climate, there is, I am convinced, no reason short of ignorance or ideology for judges to continue to give their approval to devices that effectively deny Americans access to their courts…. And lower court judges, state and federal, could take a harder look at some of the practices described here that have the same effect.

This would require a considerable change of thought on the part of many judges. Indeed, it is hardly surprising that judges who often have substantial dockets tend to look favorably on arrangements that will lessen their work burden, whether by mandatory arbitration, denial of jurisdiction, reliance on prosecutors and administrators, or similar measures. Too often, however, such relief morphs into an effective reduction of judicial responsibility, with dire consequences for the long-term ability of the courts to serve as an effective check on the power of the legislature and the executive. Arguably even worse, the situation I’ve described reinforces the belief of citizens that the courts are not an institution to which they can turn for justice, but are simply a remote and expensive luxury reserved for the rich and powerful. If the judges themselves do not take steps to counter this insidious trend, who will?

This Blog’s Takeaway:

Judge Rakoff makes several strong points, especially with regard to the costs of litigation. For this reason, Freiberger Haber LLP (the “Firm”) has been dedicated to making litigation and consultation services efficient and affordable.  The Firm understands that clients are concerned about cost certainty.  Therefore, the Firm uses flexible fee arrangements to deliver value to its clients for all types of legal matters, from the routine to the complex.

At Freiberger Haber LLP, we work with our clients to develop risk-sharing solutions and alternative fee arrangements to help them address their business and litigation challenges. Whether through hourly fees, fixed fees, collared fees, contingent fees, success fees/holdbacks, or any combination of approaches, the Firm crafts fee arrangements that reduce overall costs, improve predictability, share risks and align incentives. In this way, the Firm can provide the best value and result to its clients.

Tagged with: Alternative Dispute Resolution, Business Law And Litigation, Commercial Litigation, Complex Litigation, Securities Arbitration, Whistleblower Legal