Tuesday, November 15, 1994
Meeting of Bankers Institute
As I speak to various groups, one of the questions most frequently raised concerns huge verdicts rendered in civil cases. Efforts at tort reform, and how those efforts have failed in court, was an important issue in the recent elections. Bankers have both a direct and an indirect interest in tort reform–banks are the targets of lawsuits and their customers–the business community is also targeted. Since I can seldom provide a satisfactory answer to the questions that arise at the end of a talk in the minute or two that is available, I decided to dwell on that topic tonight.
In my recent book–Conscience and Command–I tried to describe the forces that cause law to happen. We can understand the problems only if we understand the forces that are at work in the legal arena. My book deals with those forces–not with the myriad problems that confront our legal system. Although I did not deal with tort reform as such, I think that to understand the problems in our civil justice system, we must understand the kinds of factors that I described in Conscience and Command.
Let me describe some of those factors for you:
(1) Law cannot be separated from the prevailing faith system. It is intimately connected to what we believe.
(2) In order to be operative, law must draw on the force of human motive–or passions. Law is not merely the rule of reason. It only works if we care about the outcome.
(3) We do what we do to get what we need. We need security, among other things.
(4) Law always arises from a history or mythology. It does not just arrive out of the blue sky. That history–that mythology–shapes the way we think.
could enumerate additional factors, but these are enough to get us started. If you followed those factors closely, you will realize that they are inter-related. Our need for security causes us to act–it presses us into action–and we act consistently with what we really and truly believe–as opposed to what we say we believe. Law and faith are related: separation of church and faith is sound legal policy, but separation of law and religion is impossible. Let me illustrate these underlying principles a bit further before I apply them to the civil justice system.
We seldom associate Monday with the moon, although the work month comes from that source. The word month was named for the moon, in some primitive religion. In France, it’s Lundi, and the association with lunar is clear. Likewise, the word month is obviously, and for obvious reasons associated with the moon. The abstraction has long been separated from the physical object. Yet these abstractions are essential, and we vigorously enforce them in our belief system. November of course is month, but we don’t think about the moon when we mention November. Tuesday is named after an ancient Norse god. We maintain our faith in numbers, which are pure abstractions, existing only in the mental realm. November 15th enabled us to know to be here now, and we all got here. We order our lives by this system of beliefs. It is almost totally a product of our faith. One day differs little from another. But if I tried to convince you that this is March 11, 1972, you’d be ready to haul me out of here–that’s how strong our faith is. We enforce that concept with a greater energy than we enforce the taboo against murder!
When the Germans and Russians prepared for the Battle of Austerlitz in the Napoleonic Wars, for some strange reason they failed to take into account the fact that there was a 12-day difference in their calendars–the difference between Eastern Orthodox and Western calendars. The Russians were hundreds of miles away when the Battle was fought. Needless to say, Napoleon won the battle, which probably would not have happened if the calendars had been synchronized.
Law also operates on belief–an unquestioning reliance on commonly-held values. But it is possible for undergirding faith systems to differ widely–just as the eastern and western calendars differed. These differences arise from differences in the beliefs of groups of which we are a part. The present age must deal with pluralism, and a multiplicity of conflicting belief systems. The legal community itself is a sort of group, and has its own way of looking at things. To maintain the overarching common beliefs that support the legal system may prove increasingly difficult as we enter more completely into the era of pluralism, often called the postmodern world.
Even within a group, such as the legal community, there can be startling differences in beliefs. Sometimes we, in the legal community, fail to recognize the stark contradiction in the things we accept. We recognize the right of a fetus to recover damages for injuries, but ignore the rights of a fetus in the abortion controversy. A teenager must have parental consent for marriage, but not for an abortion. How do these ridiculous anomalies arise? They have different histories, and we compartmentalize our thinking.
I think that by now I have created an understanding of the factors that are necessary to understand the crisis in the civil justice system. History; belief systems; different ways of interpreting the same facts; and human motive: acting to get what one wants or needs. At this point in time in this analysis, you will not be surprised to learn that there are two legal communities–with starkly different beliefs. The veneer of belief in common values is painfully thin. Let me tell you how this came about.
When Daniel Webster and Abraham Lincoln practiced law the common method of training for lawyers was “reading” the law in an established attorney’s office. Law school training for lawyers became firmly entrenched only after the Civil War. Development of law schools paralleled the burgeoning industrial and corporate development in America. Ownership and control of American assets changed dramatically during the latter part of the nineteenth and early twentieth century. Before, individuals owned the assets‑‑afterwards, corporations owned the assets and individuals owned only interests in corporations. Control shifted to professional managers. Law schools‑‑and the legal profession‑‑responded to the needs of corporate America.
Large corporate law firms developed to serve the large corporations. These law firms hired the top law students. Since these firms spoke the language of law, and represented the wealth of the nation, they wielded considerable political power. The lawyers not hired by these corporate firms spread out in the country side. They made decent livings with local clients who needed deeds, wills, criminal representation, collection work and the like. Local businesses continued to thrive, and continued to hire local counsel. Often solo practitioners and small partnerships possessed considerable political power in the local community.
Business centralized even more during the last half of this century‑‑with shopping malls, chain stores and banking conglomerates. Centralization steadily eroded the ability of small partnerships and solo practitioners to make a living. But I’m getting ahead of myself. Something dramatically important happened early this century when Henry Ford began to produce automobiles on the assembly line. Highway carnage. Lawsuits. Insurance companies. Sure, there had been insurance before that‑‑but insurance was the institutional response to the automobile and its carnage. Plaintiff’s work became a possible source of income for lawyers not hired by big firms. Naturally, the defense work gravitated to the established corporate law firms.
We need to say that while plaintiff’s lawyers make the decisions on one side, insurance companies call the shots on the other‑‑not the defense lawyers who work by the hour. We also need to say that both insurance companies and plaintiff’s lawyers make a great deal of money in the process. Their relationship is symbiotic.
Inevitably, attorneys who work primarily for plaintiff’s began to compare notes. The Trial Lawyers Association emerged. Plaintiff’s work became lucrative. And although defense attorneys no doubt sympathize with their friends at the insurance company, they also make money when their client is sued. The struggle, or perhaps we should call it the dance between perfectly matched partners, began. No fault insurance temporarily hampered the plaintiffs’ side. Fraud and bad faith then took on new meaning‑‑and refilled the plaintiffs’ cups. The dance moved into the legislature with tort reform. An organized, politically active plaintiffs’ bar found that it could have an impact on judicial selection. And they also found that courts can make law‑‑and are in charge of interpreting the constitution. Insurance companies, with faithful support from the business community, found that like trial lawyers, they could become involved in judicial elections. In fact, they had known it all along.
Our civil justice system concentrates on the interests of these two specialized groups and often departs from the needs of the people. The beleaguered public must stop the dance. The first step is to insist that courts get out of the politics of law making. If judges simply decide cases and avoid ambitions to make law, judicial races will not attract the political money. Judges and judicial candidates should avoid the rift between trial lawyers and insurance companies.
Courts should avoid the politics of law making. Advocates of court made law are quick to point out that courts can’t avoid making law. When a court decides a case, consistency requires that similar cases that arise later should be treated the same. This gives rise to the legal doctrine of stare decisis‑‑precedent is given the force of law. Most common law developed in precisely this way‑‑from court decisions. Even the criminal law‑‑murder, robbery, burglary‑‑did not originate in statutes but in case law.
The common law started in England, before the birth of the United States. Judges of the common law courts did not admit that they were “making” law. They firmly believed in natural law. They believed that they could discover in nature the laws that govern human conduct‑‑similar to the way that scientists discovered laws of science. The role of the judge is to find the law, declare it, and apply it. To say that courts make law is as foolish as saying that butchers make ham.
But the legal community no longer subscribes to the natural law theory. About 200 years ago an Englishman named John Austin suggested that courts actually make law‑‑they don’t just find it. The modern nation state had firmly established itself. The thought had emerged that the nation state makes law. Law is the command of the sovereign. The social compact or social contract theory of government had arrived. Law is merely a product of human reason. No ham here‑‑just butchers. Validity for law is purely a matter of genealogy: did the person or agency declaring the principle have authority? This new theory of law, legal positivism, differed radically from the natural law viewpoint. Courts properly make law as a legitimate part of the sovereign. We should note that in English law, the King‑‑or Parliament‑‑could reverse the decisions of courts. Courts do not have the last word in the English system.
Our constitution assigned lawmaking power to the legislative branch. Courts were to resolve cases by applying principles adopted by the legislative branch. Then came the inevitable problem‑‑who decides whether a statute violates the constitution? The U. S. Supreme Court, in Marbury v. Madison decided courts can declare legislative enactments unconstitutional. Unlike the Parliamentary system in the England, courts here have the last word.
Another factor subtly promotes the law-making role of courts. In 1871, Dean Langdell established the “case method” of legal instruction at the Harvard Law School. Students read appellate opinions to learn the law. Law schools throughout the nation quickly adopted this effective teaching tool. Law schools became the predominant method of law study, replacing the old system of “reading” the law. The case method of study inevitably created a powerful impression in the minds of lawyers that courts make law. Future Supreme Court Justice Oliver Wendell Holmes, Jr., a Harvard professor, proclaimed “Law is what a court does.”
Lawmaking by the courts probably reached an all-time high with the Warren court. No longer content to simply strike down legislative measures that the court deemed unconstitutional; the Warren Court began to actually declare positive law in the name of the Constitution. In the famous Miranda case, for instance, our Supreme Court prescribed a litany a rights that law enforcement officials must describe to a suspect before questioning begins. The Supreme Court now intentionally selects cases to declare principles with prospective operation.
Step by step the courts have moved into the political arena of lawmaking. They have moved far beyond merely making law as precedent when they decide cases. They decide whether legislation is unconstitutional, and even use the constitution as a basis for declaring new law. Their own logic and ingenuity‑‑not natural law which incorporates the collective wisdom of the community‑‑is the basis for their decisions. The case method of instruction in law school reinforces the impression among lawyers that all law comes from courts.
The problem is that the advocates of natural law had a point. Law must draw its real force from the deep‑‑seated beliefs of the people‑‑the wisdom of the entire culture. The court endangers it own authority and the very concept of law if it sets aside legislative enactments which the people want, or declare principles that are repugnant to the beliefs of the people. Courts necessarily establish law by deciding cases. This is okay, as long as they are really deciding cases‑‑and not intentionally making law.
The problem is that the law of the lawyers and courts can slip away from our social reality. It becomes law for the lawyers, and lawyers even believe that only they are qualified to pass on the qualifications of judges. The economics of law practice–the needs of the lawyers, has an ever-increasing impact on the substantive content of law.
The problem is not one sided. As I pointed out earlier, there are two parts to the legal profession: the part that used to represent the establishment, and the recently arrived plaintiff’s bar. They were both called into existence by powerful needs. What possible justification for the plaintiffs’ lawyers, you may want to ask? Let me suggest a few:
(1) There is immorality in the market place. It is real. Many businesses do not operate morally and ethically, and have little concern for the human element. The problem of immorality in the market place is real.
(2) There is no one other than the plaintiff’s lawyers to tackle the problem. Efforts at self-regulation has proven futile, and governmental bureaucracy is even worse.
(3) Governmental bureaucracy is totally ineffective. It is more a part of the problem than of the solution. The banking department, for instance, may regulate some things quite well, but I saw one computation of credit life insurance, approved by the department, arguing that although the premium was almost twenty percent of the principle of the loan, that it did not exceed one dollar per one hundred dollars per year, which was the legal limitation for such premiums.
But on the other hand the jobs—the goose that laid the golden egg—is in danger of being roasted, in the present environment of runaway verdicts that exists in this state. The law of the legal community has truly departed the social reality with which it should be dealing. The answers lie in reality crashing through the artificial, non-workable paradigms that the legal community has created. The following things could bring that about:
1) The resurgence of faith in transcendent values — that right and wrong have a basis in reality and are not merely mothers of individual opinion. One belief is not really just as good as another.
2) The values of the legal community must be brought in line with the values of the larger community.
(A) The adversarial system is not always the best way to resolve disputes.
(B) The constitution is important but not sacred and not infinitely flexible.
(C) Absolute zeal for the cause of an immoral client is not a part of professionalism.
(D) Legal and judicial ethics must embody the moral aspirations of the larger community–not just those of the legal profession.
(E) The legal profession must merge its belief system and arrive at commonly-held values. Our leaders must first understand the problem. Stop-gap measures won’t work. And Judges must differentiate the judicial profession from the legal profession The work of judges differs greatly from that of lawyers, although they both deal with the law.
(F) The business community must behave morally. Morals must have given a larger role in the process of social regulation.
How do we do all of this? Reform of the magnitudes of which I speak may only be possible in the realm of religion. There must be major shifts in our belief system. When our actions on Monday are consistent with what we say we believe on Sunday, there will be hope. When we realize that science can’t create or even recognize morality, there will be hope.
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