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The government solution to a problem…

…is usually as bad as the problem. In fact, it is often worse. Let us say the problem we are given to solve is that poor people are not getting access to justice. The government solution is to give them legal aid. It seems like a reasonable solution. Unfortunately, the solution is worse than the problem. Instead of creating an utopian legal system, it causes taxpayer money to be used to benefit a very small minority who can bring dubious cases at no risk. Indeed, on a big picture level, it acts as a cancer on the legal system, not an improvement. On the other hand, market-based approaches can improve the legal system rather more effectively… but, of course, the politicians did not think of that.

15 comments to The government solution to a problem…

  • D. Timmerman

    Slightly related rant:

    About two weeks ago the popular arthritis drug, Vioxx, was pulled from the shelves because studies indicated that the drug could increase the risk of heart attack or stroke after prolonged use.

    Yesterday evening, I saw my first law firm advertisement regarding the matter: “If you have suffered a heart attack while taking Vioxx, there may be legal remedies. We’re tired of hearing about drug companies that put profits before people.”

    Here’s why that really pisses me off:

    1. The drug was pulled because it COULD increase the risk of heart attack. The reason they pulled it instead of just issuing a warning is because drug companies fear lawsuits like the one the aforementioned firm is likely to pursue.

    2. Vioxx was a VERY effective drug at treating arthritis and arthritic pain. I already know of at least one person who said his grandmother is trying to find a way to get the drug from Canada because she has been taking it for a couple of years. It works very well for her, and that she doesn’t care if it increases her risk of a heart attack. She has cancer, for one, and living without pain is more important to her than the increased risk of a heart attack.

    Sometimes drugs are going to be released that later may be found to have unknown side effects. All efforts should be made to let people taking the drug know what those side effects are, and then let them decide if they are willing to take that risk.

    I’m tired of hearing about lawyers who put profits ahead of people.

  • Richard Easbey

    oh, baby…you nailed it. Congrats, D. Timmerman. (ever notice how lawyers NEVER take cases like this on a “pro bono” basis? hmmm……)

  • flaime


    Offer an alternative that still gives people without means access to the same level of legal representation…Because a pure free market refuses to do that.

  • Daniel

    I believe the article was referring to legal representation for civil/personal injury matters. In the US there is no shortage of available representation for that. Unlike the UK (I believe), US personal injury lawyers are permitted to work on contingency basis, often taking 33% of any award or settlement. This is the market solution I believe the author was referring to.

  • On drugs: does anyone here think that there should be prescriptions for drugs at all? Just curious.

  • Euan Gray

    US personal injury lawyers are permitted to work on contingency basis, often taking 33% of any award or settlement

    And thus aim for high settlement payouts, which in turn increase the cost of civil liability insurance premiums, which in turn increase the price of goods and services and also lead to the imposition of restrictive rules and petty officiousness, which in turn disadvantages most the least well-off in society. This is better than civil legal aid how, exactly?

    Probably something does need to be done about civil legal aid, but the market doesn’t necessarily have the answer. How about just making people who launch speculative litigation on the back of legal aid repay the costs if they lose?


  • Dave J

    Euan, while I don’t know about Scotland, the legal professions in England and Wales have been moving toward allowing contingency-fee arrangements for quite some time now, and they practically do in name if not in fact. Were the curtains pulled down and this accepted completely, rather than, as now, trying to find creative loopholes around the courts still regarding such contracts as violating the archaic rule against “champerty” (owning the a stake in someone else’s cause, something discarded in every other common-law jurisdiction, the last being Ontario sometime in the 90’s), it would be possible to adopt several of the features of the US civil justice system without all of its excesses. The sharpest difference, of course, whether one thinks this a good thing or not in principle, is that England has dramatically cut back the availability of the civil jury in the past 100 years, to the point where, if I’m not mistaken, they only hear defamation cases. Meanwhile, here in the US, the right to jury trial in a civil suit is protected by the Seventh Amendment and its state-law analogs. It is probably that more than anything that allows the American plaintiffs’ bar to get so immensely rich; that and class actions, which if they exist in the UK, I certainly haven’t heard about it.

  • Daniel

    Euan Gray-
    In an adversarial system, a lawyer will always aim for the highest possible payout, thus increasing insurance premiums, etc.
    Just for the record, because I don’t know enough about how legal aid operates in the UK for civil cases, I didn’t mean to pass judgment on which system is better as a whole. But certainly, the US system seems to do a much better job of delivering legal aid in these instances, externalities aside. That I believe was the point of the article.

  • Dave J

    Er, that should, of course, read “in fact if not in name,” rather than vice-versa.

  • flaime


    The problem with such approaches is that the represented, to my understanding, rarely gets as much as advertised out of such arrangements after shady lawyers add on their various contingencies and extra-contract expenses, etc…They serve only to make lawyers rich, not to get injury victims just compensation.

  • Euan Gray

    The problem with contingency cases is exactly that which the prohibition of champerty is designed to solve – lawyers interested in their own enrichment rather than in the pursuit of justice. No-one in their right mind would object to someone being compensated for having a wrong done to them, but that doesn’t mean that the legal system should encourage frivolous and speculative litigation, which in practice does have exactly the outcomes I mentioned.

    Just because other common law jurisdictions remove the restriction on champerty, does that mean the principle is wrong?

    It’s hard to see another way that the market can provide legal aid – the cost of failed cases has to be recouped somehow, and the market can only do this through increasing the payouts in successful ones. I think that in this case there is no useful market solution – I think also that it is fundamentally naive to consider that in EVERY case a market solution is NECESSARILY better than a state solution. It may be in many, even most, cases, but not all.


  • Dave J

    But the practical divide within the common-law world, in terms of enormous payouts and frivolous litigation isn’t between jurisdictions that maintain the rule against champerty (England) and those that don’t (everywhere else); it’s between those where most tort suits are presumptively heard by juries (American states, though some far more egregious than others) and those where civil jury trials are unusual if not unknown (everywhere else). You don’t hear the horror stories like millions for spilling coffee on yourself coming out of, for example, any province in Canada or any Australian state even though they all allow contingent fees.

  • Tony Di Croce

    The solution is not to bar pro-bono legal services, or to attempt to make illegal certain classes of lawsuits…

    What is needed is a whole lot of judges who can QUICKLY, IE, within a few seconds see the obsurdity in some of these cases and slap them down without wasting a lot of time and money…


  • limberwulf

    Here is my idea of a solution:
    1) Change the pay structure of class action lawsuits. The payout to the lawyer should be up to those hiring him, and each should have an individual say in the matter.
    2) Make the lawyers and the plaintiff’s responsible for the costs of the defense in civil suits if the lawsuit is lost.
    3) Limit rewards for “psychological” effects in civil suits.
    4) Use monetary punishments that would be paid out to the victims in criminal cases. This should reduce the demand for civil suits by those with valid complaints.
    5) Limit the relevance of “precedent”

  • Euan Gray

    How about limiting the payout to auditable losses?