Torts - Cases, Principles, and Institutions Fifth Edition, 2016a

Witt & Tani, TCPI 10. Damages
plaintiffs’ bar to make in lawsuits. Lester Brickman, an especially outspoken critic of contingency fees,
argues that contingency fees have produced in the United States a massive, foolish, and unaccountable
system of ad hoc regulation that lines the pockets of one group (the plaintiffs’ lawyers) while
impoverishing virtually everyone else.
American tort lawyers’ profits have risen prodigiously to levels far beyond what is
necessary to create sufficient incentives for lawyers to provide access to the civil
justice system. Lawyers justify their fees by saying that they bear the risks of losing
the cases. And indeed, by chasing down business through advertising and
aggressive outreach, some lawyers appear to be among American society’s
quintessential entrepreneurs. They invest and put at risk time and capital,
sometimes amounting to millions of dollars in exchange for a percentage of an
uncertain recovery. Professional athletes, rock stars, hedge fund managers, and
CEOs enjoy huge earnings. Why not lawyers? How can we say that their returns
are excessive, so long as the field of play is level and they play an honest game?
In actual fact, the field of play is tilted, the deck is stacked, the game is fixed. Many
lawyers charge for entrepreneurial risks they don’t actually bear. By careful case
selection, they prevail in the substantial majority of the cases they accept. Despite
the limited risk, their share of damage awards routinely amounts to one third or
more. Lawyers can charge for these phantom risks because they use positional
advantages to shield themselves from market forces. They charge standard
contingency fees which are intended to compensate lawyers for the risks they are
assuming, but do so even in cases where there is no meaningful liability risk and a
high probability of a substantial recovery. They benefit from enormous economies
of scale in class actions and other large scale litigations but do not share these
benefits with their clients. . . .
The quest for contingency super profits has led lawyers, in collaborative efforts with
courts, to use the courts to secure outcomes which are indistinguishable from
legislative acts and administrative rule-making. This “regulation through litigation”
dilutes the democratic form of American government by exempting large areas of
policy from legislative control. In effect, lawyers are using their positional
advantages to convert policy making into a highly profitable enterprise. When
public policy making is thus removed from legislatures, so too is political
accountability and public participation in the process.
Lester Brickman, Unmasking the Powerful Force that has Mis-Shaped the American Civil Justice
System, 4 GLOBAL COMPETITION LITIG. REV. 169 (2010). Brickman exaggerates the problem; not
all lawyers, of course, will be able to screen for low-risk cases, and lawyers near the bottom of the
pecking order may take on cases with considerable risk. But Brickman makes an interesting
observation: the very best lawyers are often able to select their cases carefully. They can screen
for only the highest value claims, which are often the claims most certain to produce damages
awards. And if that is so, then the market in legal services may systematically assign to the best
lawyers not the hardest cases that warrant the greatest skills, but rather the easiest cases (in the
sense of being most certain and thus often of highest value).
Brickman’s proposed solution is what he calls the “early offer” proposal:
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