Are There Too Many Lawyers?; J. Fulda and P, Vincent

-i.e., by redistribution of existing wealth Dr. Joseph S. Fulda has been writing for The Freeman since 1981. Lt. PatrickJ. Vincent ofthe U.S. Navy is currently assigned to the U.S.S. Alaska. 19 rather than the creation of new wealth. Indeed, it is clear that the very same ethos that informs legislative redistribution is re sponsible for judicial redistribution: the cul tivation of a state of mind which asserts the victimhood of select groups. While legisla tive redistribution typically focuses on race, gender, ethnicity, poverty, and similar "vic tims, " judicial redistribution typically fo cuses on class interests, among them: ten ants, consumers, employees, and those suffering from injury, illness, or loss of function due to unfortunate accidents that are no one's fault. Besides the moral point, judicial interven tion-like all strictly redistributive process es-results in a far less robust economy, one designed to avoid judicial redistribution rather than one designed to create and produce. Empirical support for this conclu sion abounds: (1) The United States has only five percent of the world's population, but has fully seventy percent of the world's lawyers. (2) We spend more than eighty billion dollars a year on direct costs of litigation and on insurance premiums and a total of three hundred billion dollars on indirect efforts to avoid liability. (3) The threat of litigation has caused 47 percent of manufacturers to withdraw products from the market. (4) The threat of litigation has also discouraged no less than 25 percent of manufacturers from some types of product research. (5) Largely due to the fees brought 20 THE FREEMAN • JANUARY 1993 in by the plaintiffs'bar, our trial lawyersare the best-paid attorneys in the world. (6) Per capita, we have 30 percent more lawsuits than do the Japanese, one of our main competitors in the creation of wealth. (7) In Japan, the ratio of engineers to lawyers is 20 to 1, but in this country it is 2.5 to 1.1 At this point it is well to make some qualifications. First, it is true that the market may decide that the potential harm of a risky good or service outweighs its potential ben efits. The market properly both embraces and limits risk, as reflected in the supply and demand schedules for risky goods and ser vices. Second, liability for civil wrongs torts-remains a powerful disincentive for fault, and one that works. Third, contin gency fees do allow access to the courts by those with a genuine complaint who cannot afford to retain counsel.

Unfortunately, however, far too many folks welcome the chance to be plaintiffs, since being a plaintiff is cost-free. The con tingency-fee cases that the plaintiffs' bar handles-principally malpractice and prod uct liability cases-allow any number of lawsuits regardless of the merits of the complaints. Indeed, since there is no effec tive penalty for frivolous lawsuits, the de mand schedule is potentially infinite, re strained only by a vague sense in ordinary citizens on what is properly the subject of a suit at law and what is not. But the statistics above show nothing if not that such sensi bilities are rapidly disappearing, and when obstetricians stop delivering babies en masse, it is time to restore some limits on the demand schedule for lawyers. The most obvious reform, long advocated by many, is to require unsuccessful plaintiffs to pay the defendants' legal fees. A second reform is to make the system inherently less redistributive, by changing the burden of proof. The present system allows redistri bution from defendant to plaintiff when there is "a fair preponderance of the cred ible evidence," i.e., with just 51 percent of the merits in the matter. Whatever hap pened to the old adage, "Possession is nine-tenths of the law?" The standard cur rently used for some federal suits, "clear and convincing evidence," is much to be preferred.

It cannot be emphasized enough that the only way to genuinely improve the lot of the masses is by the creation of new wealth rather than the redistribution of existing wealth. As Governor Richard Lamm put it, "No nation in history has ever sued its way to greatness.,,2 0 I. David Gergen, "America's Legal Mess," U.S. News and World Report, August 19, 1991, p. 72. 2. Ibid.

Explore Public Policy this Summer If you see a place for a free society in solving today' s social and economic problems, come and spend your summer with the Charles G. Koch Charitable Foundation. The Foundation's Summer Fellow Program will accept up to 30 undergraduates for its 10 week program beginning June 12 and ending August 21. •Participate in two weeklong semi nars focusing on the intellectual foun dations ofliberty and addressing top ics in economics, history, moral phi losophy, and foreign policy. • Develop the skills required for pro fessional policy analysis, including researching and writing, public speak ing, and media interviewing. •Work for eight weeks with one of Wash ington's many insti tutions that are searching for solu tions to social and economic problems with the tools of indi vidual liberty , private property, and the rule of law. • Learn to research, write, and publish un der the guidance of a professional editor.

• Live and work with other students and join a growing network of young people who are exploring the potential of market-based poli cies to solve society's complex problems. Accepted applicants will be flown to and from Washington, DC, housed in apart ments for the summer, provided with room and board during the seminars, and given a $2,000 stipend. Undergraduates interested in applying the ideas of liberty to public policy should apply today. Application deadline: March 1, 1993 For more information about the program and an application form, write or call: Summer Fellow Program, Charles G. Koch Chari table Foundation, 1350 Eye St., NW, Suite 665, Washington, DC 20005, Telephone (202) 842 4616,Fax(202)842-4667.