When asked about why he consented to the payment of the despised AIG bonuses, executive Edward Liddy cited, among other reasons, the threat of litigation.
Ending up in Court these days, even when truth is on your side, is as appealing a proposition as eating a sand sandwich while camping in the Sahara.
A very good friend of mine took his car (we affectionately referred to it as Lamont) to Jiffy Lube for a service that included having the vehicle's fluids checked. Shortly after being serviced, Lamont died -- a loose radiator cap resulted in coolant bubbling out of the radiator causing the engine to overheat and seize up. When my friend asked Jiffy Lube to resolve the issue, the company first claimed that its employees who were charged with checking the fluids never removed the radiator cap but simply did a "visual inspection" (who knew that automotive service at a national chain now includes little more than a quick peek under the hood). When confronted with its own service records indicating that the fluids had, in fact, been replaced (thus defeating the "we never touched it" theory -- again, a rather odd theory for an auto repair establishment to employ in any event) and after losing at small claims court, Jiffy Lube appealed. It was only at that appeal, 8 months after the incident in question, that Jiffy Lube decided not to contest liability but instead limited its arguments to the damages for which it would be liable.
Now while some might describe my friend as a latte-sipping liberal, he is not the Prius-driving type. He was the 1997 Ford Taurus-driving type (these were, in fact, Lamont's stats) and after his encounter with Jiffy Lube, he became the bus-riding type. And as he never demanded anything from Jiffy Lube other than that the company fix Lamont or compensate him for his very limited damages (again, no disrespect to the dearly departed, but Lamont was over 12 years old), one might think that the easiest thing to do would be to step up and try to remedy what was really a very simple issue.
Not so, apparently. Much better to drag things out, causing the litigant maximum inconvenience so as to wear him down a bit.
Whether being bullied by an automotive chain or cowed into paying bonuses to the executives at a failed institution, the experience or even the specter of litigation is often sufficient to leave even the sturdiest among us quaking -- and with good reason. Having represented plaintiffs who've lost good cases because likable defendants can smile while lying and defendants who've spent untold sums defending against frivolous lawsuits that can only be described as legalized extortion, the courthouse takes its toll. Indeed, rather than being a mechanism for arriving at truth, litigation often becomes either 1) a method to coerce unfortunate compromises (such as the paying of the AIG bonuses), 2) a tactic in which confusion and distraction supplant real truth seeking, or 3) a deliberate exercise in exhausting the other side's resources.
Mired as we are in a financial crisis that is due in some part to overreaching by Wall Street executives, however, this may not be the best time to raise the issue of litigation reform. The courthouse serves as an important bulwark against the arbitrary deprivation of our rights and interests and impeding access to it is in neither our individual nor our collective interest.
In an era where we are contemplating new, broader relationships between public and private institutions and the individuals who manage them, however, it is time also to rethink the manner in which we resolve disputes -- not just by and among those entities but more broadly as well. We should seek to ensure that the threat of liability does not deter decision makers from taking appropriate corrective actions with respect to the executive class it now seeks to regulate and further, that those in and among that class are not discouraged from admitting failures and taking appropriate corrective actions because of the fear that such admissions will be used against them.
I am all for maintaining reasonable access to the courtroom. Only the judiciary, insulated as it is from the vicissitudes of political pressure and posturing, has so consistently (albeit imperfectly) set about the task of guarding constitutional rights and liberties even in the face of popular opposition. Nonetheless, we would all do well to remember that litigation, powerful sword that it is, should be a tool of last resort. Indeed, our court system should be viewed as a mechanism for protecting our own rights -- and not as a bully club for beating our neighbors into submission.