Whose Pocket?

If you're not a large corporation with unlimited funds for lawyers (or if you haven't bribed the judge) it may be difficult for to get prompt and proper adjudication of a lawsuit. The problem is one that most affects a plaintiff who is an average citizen suing a large firm. Two of their (the defendant's) techniques (among others) are delays in trial, and extension of the proceedings in order to make the litigation too expensive for the plaintiff to afford.

On the other hand, we hear, on occasion, of a jury that finds for a plaintiff and awards not only compensatory damages, which may not be large, but punitive damages in an amount that staggers us. The payment of many millions – or tens or hundreds of millions – may be decreed. Of course the defendant will appeal and invoke any legalities that may help it (I'm assuming it's a corporation) from paying the damages – at least not as much as has been determined. So the plaintiff, who may have won the case, remains without compensation for the harm done him, and faces more time in court.

Settlements, of course, will sometimes, shorten the process. The problems with them are that the amounts paid are less and, after the lawyer is paid, may not represent adequate compensation for the damages and for the plaintiff's time and aggravation. Often moreover, the parties are not allowed to disclose the details of the settlement, in the hope that others won't be encouraged to sue in the hope of a windfall.

Another consideration is that the punitive damages may actually be excessive in relation to the harm to the individual, although it may not be small when damages to all of those affected are considered. It winds up as a windfall for the plaintiff and his lawyer – one that may not be warranted. It helps them, but not the public at large. It's not fair.

Can a better system be devised? Perhaps. I'm not especially concerned about corporations that have harmed our citizens and, although aware of the faults, would continue to do so because it helps their bottom line and they don't anticipate ever having to pay the piper – or at least not having to pay very much. (I must admit my view that some companies that are following the rules and are unaware of damage they do should be evaluate differently. I leave that concern for another time.) My unease is with those who feel they have been wronged. I realize that individual suits may be a form of extortion but I'm convinced that the greater fault is on the part of those who wronged them, if that is the case.

I also feel that a large payment for silence, or excessive punitive damages awarded to an individual because a jury is feeling its oats, or for whatever other reason, does not serve the public good, however much we may enjoy the fact that a corporation with deep pockets is being humbled. I am also troubled by the long delays which deprive the plaintiff of justice.

My lack of legal credentials, however, does not forestall me from making some proposals for dealing with this situation. I'm nothing if not all-knowing – even in areas in which I lack knowledge. And I also recognize the fact that at certain levels the rules are decided locally, reflecting local views rather than those of the federal government. If they are deemed reasonable and worthy, one or more of my proposals could be incorporated into state law. There are three areas that I want to address.

The first relates to punitive damages. They should go to the government – to all of us (for tax relief, improved government projects, aid for the needy). They are fines that should not go to the individual suing. Too much of it goes to his lawyer in any case. Decisions about punitive damages should be argued following a decision about responsibility and not be part of the initial findings of the jury, although compensatory damages may, as discussed below. Government lawyers should take over if an initial decision of guilt is made. They'll have more time and backing than the plaintiff's lawyer, and are better prepared to withstand the actions of an opposing corporation's staff.

The second area of note for me is that of compensatory damages. From my perspective they should be generous if the jury believes the defendant to be at fault. In addition to repayment for the actual offense, the following areas should be compensated (assuming they are not factors in that offense): time lost related to the offense itself and the legal actions that followed; legal expenses (and perhaps these should be specified so that they don't come from the overall settlement); embarrassment and damage to the plaintiff's reputation; anticipated future losses and costs likely to result from the wrong; and any other area that the jury considers appropriate. The threat of such damages and of government lawyers in the second phase of the action may convince the wrongdoer that, since there would be no consideration of punitive damages, a quick settlement, even if generous, would be less costly than protracted legal actions. (Of course if the jury decides that the suit was frivolous, costs should be paid by the plaintiff.) Class action suits would not be affected by these rules.

Finally there is the consideration of time. “Justice delayed is justice denied.” Trials should be swift. There should be short time limits set for consideration of the facts prior to trial, for appeal of verdicts, preparations for appeals since the one appealing will already know why he is dissatisfied, and any subsequent actions. At some point the awarded damages should be paid, irrespective of the stage of litigation. Whoever considers the decision unjust would have to initiate a new suit at that time, and the rules would be the same.

The purpose of such procedures would be to speed the judicial process and ensure the rapid payment of whatever is due – whether to the plaintiff or defendant. And it is aimed at the payment to the government of sums that will be available for costs that later result from the actions that prompted the suit.

If “deep pockets” are going to cover the costs of damages they've done – both to the individual and to society, and to pay them in a reasonable time, it may be appropriate to change the rules of “the game.”

May 25, 2017