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Extravagant Waste in the Law Business
By John Stossel
In recent months, we've seen seemingly endless arguments over the Supreme Court. But as I watch people comb through old documents and parse interviews for clues to the nominees' positions on high-profile constitutional questions, I'm struck by how little attention has been given to one of the biggest problems in America's judicial system: the enormous cost and creativity-killing pace of ordinary civil cases. In my years doing consumer reporting, I watched every American industry find ways to do things better, faster, and cheaper. Today's computers cost less, but are more powerful. Cars got better. Supermarkets offer more for less. Most every business is better.
But not the law business. In law, everything is slow and expensive, and our choices limited.
For $1 I can buy a newspaper, and every day it's different. But try to get a divorce or a simple will for less than $300.
The lawyers defend their fees and snail-like pace, saying, "We've got to make sure you get due process." Glad they're so concerned. But when there's no money in a case, people have trouble getting a lawyer, let alone getting due process. When there is money, lawyers even insist on undue process. In the O.J. Simpson trial, they even quibbled about the jewelry the other lawyers wore.
Other businesses pad bills, too, but competition limits it. There's less competition in law because lawyers outlawed competition from outside their profession -- they prosecute paralegals who offer cheaper alternatives, calling it "unauthorized practice of law." And they are all bound by rules of procedure, drafted by lawyers and, for the federal courts, issued by the Supreme Court, that call for volumes of paper and make lots of work -- lucrative work, if you're a lawyer.
Civil cases usually take years. It almost makes me feel sorry for the people who sue me. A guy in Philadelphia who said I damaged his reputation had to wait four years just to get me into court.
The essence of my story was that Irwin Rogal, a dentist, ran a dental "mill," telling people (including me, after he examined me for a "20/20" story) we had jaw problems, and then charging big bucks for dubious "treatments." In his lawsuit, he claimed he had not recommended treatment to me.
Sounds simple for a court to resolve. The exam was on videotape. The jury could watch the 40-minute tape and then decide. But that never happened. Instead, the dentist's lawyers and mine spent three years sending legal papers back and forth. My lawyers (did I mention they were paid by the hour?) demanded that the dentist produce vast amounts of paperwork detailing "all persons other than your attorneys with whom you have had written or oral communication" and "each workshop or seminar in which you have participated as a speaker."
The dentist's attorneys demanded that we "state the title and author of each book that was used as a source of information, the name and date of publication of each newspaper, magazine, pamphlet . . . documents . . . " In case we didn't know what documents were, they spelled it out: "Any abstracts, accounts, accounting records, accounting advertisements, agreements, bids, bills, bills of lading, blanks, books, books of accounts, brochures" -- that's just the A's and B's.
Eventually, my case got to court. I assumed the jury would watch the tape, but they never did. Instead, we had war. War is what a lawsuit is. Each side played snippets of the videotape. His side played a few minutes that made it seem as if he hadn't recommended treatment; my side played a few that demonstrated he did. This happened again and again -- for days. It was ridiculous. That's what got to me most, watching my case: the extravagant waste. Even with lawyers charging hundreds of dollars an hour, the judge just let it go on and on.
I finally won, but the ordeal cost ABC a fortune. Why couldn't the judge say, "Shut up. This is a waste of time and money. We're just going to play the tape."
"Because most judges are afraid to offend," Joe Jamail, a Texas lawyer who's made millions, told me.
So these lawyers are just self-indulgent? "No," said Jamail. "They were being paid."
By John Stossel
In recent months, we've seen seemingly endless arguments over the Supreme Court. But as I watch people comb through old documents and parse interviews for clues to the nominees' positions on high-profile constitutional questions, I'm struck by how little attention has been given to one of the biggest problems in America's judicial system: the enormous cost and creativity-killing pace of ordinary civil cases. In my years doing consumer reporting, I watched every American industry find ways to do things better, faster, and cheaper. Today's computers cost less, but are more powerful. Cars got better. Supermarkets offer more for less. Most every business is better.
But not the law business. In law, everything is slow and expensive, and our choices limited.
For $1 I can buy a newspaper, and every day it's different. But try to get a divorce or a simple will for less than $300.
The lawyers defend their fees and snail-like pace, saying, "We've got to make sure you get due process." Glad they're so concerned. But when there's no money in a case, people have trouble getting a lawyer, let alone getting due process. When there is money, lawyers even insist on undue process. In the O.J. Simpson trial, they even quibbled about the jewelry the other lawyers wore.
Other businesses pad bills, too, but competition limits it. There's less competition in law because lawyers outlawed competition from outside their profession -- they prosecute paralegals who offer cheaper alternatives, calling it "unauthorized practice of law." And they are all bound by rules of procedure, drafted by lawyers and, for the federal courts, issued by the Supreme Court, that call for volumes of paper and make lots of work -- lucrative work, if you're a lawyer.
Civil cases usually take years. It almost makes me feel sorry for the people who sue me. A guy in Philadelphia who said I damaged his reputation had to wait four years just to get me into court.
The essence of my story was that Irwin Rogal, a dentist, ran a dental "mill," telling people (including me, after he examined me for a "20/20" story) we had jaw problems, and then charging big bucks for dubious "treatments." In his lawsuit, he claimed he had not recommended treatment to me.
Sounds simple for a court to resolve. The exam was on videotape. The jury could watch the 40-minute tape and then decide. But that never happened. Instead, the dentist's lawyers and mine spent three years sending legal papers back and forth. My lawyers (did I mention they were paid by the hour?) demanded that the dentist produce vast amounts of paperwork detailing "all persons other than your attorneys with whom you have had written or oral communication" and "each workshop or seminar in which you have participated as a speaker."
The dentist's attorneys demanded that we "state the title and author of each book that was used as a source of information, the name and date of publication of each newspaper, magazine, pamphlet . . . documents . . . " In case we didn't know what documents were, they spelled it out: "Any abstracts, accounts, accounting records, accounting advertisements, agreements, bids, bills, bills of lading, blanks, books, books of accounts, brochures" -- that's just the A's and B's.
Eventually, my case got to court. I assumed the jury would watch the tape, but they never did. Instead, we had war. War is what a lawsuit is. Each side played snippets of the videotape. His side played a few minutes that made it seem as if he hadn't recommended treatment; my side played a few that demonstrated he did. This happened again and again -- for days. It was ridiculous. That's what got to me most, watching my case: the extravagant waste. Even with lawyers charging hundreds of dollars an hour, the judge just let it go on and on.
I finally won, but the ordeal cost ABC a fortune. Why couldn't the judge say, "Shut up. This is a waste of time and money. We're just going to play the tape."
"Because most judges are afraid to offend," Joe Jamail, a Texas lawyer who's made millions, told me.
So these lawyers are just self-indulgent? "No," said Jamail. "They were being paid."
Is due process too sacred in society? Is Law practice an unfair monopoly upheld by artifical information asymmetry?
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