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Our legal
system allows for contingency cases as a method of giving access to
the courts to those without the assets to hire counsel. This is a
deliberate and well intentioned strategy. I think it is also a good
idea.
The system does lack
checks and balances. The "loser pays" system has the problem that it goes too
far. Contingency representation would die because the case might be lost and the
counsel would be too much at risk for the costs.
The facts are not
known in advance of a suit. The suit itself provides methods of coercive
discovery of the facts. The current system does not encourage cases to be
dropped once the facts are well enough established for the counsel involved to
have a good sense of the outcome.
I have long
advocated a system that divides cases into three possible
results:
1) Damage was done and damages are awarded including costs of counsel and
courts, possibly including punitive damage.
2) No damage was done but a legitimate question was brought to the court.
Neither side pays.
3) Damage was not done and the question brought to the court was not
legitimate. The loser pays.
The jury decides the
type of result. The court determines the costs that the plaintiff pays in case 3
and awards payment to the defendant. I think that the counsel for the plaintiff
should be the guarantor of these damages only to the extent that the counsel
benefits from any award in case 1. Thus counsel hired for a fixed fee would not
be at risk for following the demands of their client.
The advantage of
this system is that contingency lawyers can determine for themselves if a
case falls into group 1 or 2 vs. group 2 or 3. They are encouraged to do their
homework up front and are motivated to pursue cases that are likely to be legit
and to avoid spurious cases where there is a good chance they will get
stung.
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