America’s Attachment to Litigation Has Negative Impact

Historically, the United States and its ideals of freedom and opportunity have been symbolized by wholesome and endearing traditions such as apple pie and baseball. More recently, however, the image of Casey at the Bat has given way to Casey at the courthouse, as the civil lawsuit – despite its tendency toward antagonism and manipulations – is increasingly lauded as the American way.

In this land of the lawsuit, opportunity does not spring from a future harvest, but from yesterday’s malfeasance or misfortune. In this respect, America’s love affair with the lawsuit may be reflective of a larger cultural shift in which we are no longer content to pull ourselves up by the bootstraps but instead must “Get Rich or Die Tryin’.”

Whatever the overarching causes may be, we should recognize two specific factors that have contributed to the number of lawsuits in the United States. The first factor is the aptly named American Rule, whereby each party is responsible for their own attorney fees unless there is some contractual or statutory basis for shifting fees to the other party. Courts have mitigated the “side effects” of the American Rule by adopting and applying rules that authorize sanctions against parties who bring frivolous lawsuits.

The second factor is the dearth of opportunities to resolve disputes outside of the court system. Fortunately, with the rising use of various forms of alternative dispute resolution (ADR), this second factor is fast becoming a historical phenomenon. On this point, our court system should be commended for embracing and encouraging the use of ADR.

At the end of the day, the real concern is not the cause of litigation, but its cost. The cost to the parties is often discussed and widely recognized, but the indirect costs of litigation are often overlooked. Indirect costs come in many forms. For example, when court dockets are crowded and the judiciary is overburdened, the costs necessarily fall across all types of judicial proceedings, including criminal matters, since a finite number of judicial resources must be allocated across a larger number of cases.

Moreover, every civil lawsuit imposes indirect costs on the taxpayers because the judicial resources used in disposing of the lawsuit are publicly financed. Some calculations have shown that, on average, each civil case costs the taxpayers around $3,000.

Against this backdrop, courts have increasingly recognized the value of ADR. And many courts have specifically recognized the merits of the National Arbitration Forum (FORUM), its Code of Procedure, and its “impressive assembly of qualified arbitrators.” Marsh v. First USA Bank, 103 F.Supp.2d 909, 925 (N.D. Tex. 2000). For example, a federal court in California recently declared that FORUM arbitration “is without question an inexpensive, efficient, and convenient forum for resolving commercial disputes.” Provencher v. Dell, Inc., 409 F.Supp.2d 1196, 1198 (C.D. Cal. 2006).

Given the substantial and oft hidden costs of civil litigation, all Americans should hope that arbitration and other forms of ADR continue to remain a robust and viable alternative to court litigation.

Tags: America's, Attachment, Impact, Litigation, Negative