Is There Actually A Litigation Crisis?

I think it was Anthony Downs, a Senior Fellow at the Brookings Institution, who coined the phrase "exagger-books" to criticize works like Future Shock, by Alvin Toffler.  It has been quite a few years since I read Future Shock, and I have no intention of picking it up again, but from my recollection it is full of dire data showing people are suffering from information overload and loss of ability to function properly because of the increasing rapidity of change.  If memory serves, one of the illustrative anecdotes about how change destroys positive values was that of French housewives, who were used to carrying produce home daily in their own canvas bag or net, and who initially resisted the idea of using throw-away plastic bags, but then became wastefully socialized like the rest of us.  According to Downs, authors like Toffler were guilty of "megahyping the pseudo facts."   Let’s test Downs’s hypothesis with this question: remembering Future Shock was published in 1970, 36 years later do you believe you personally have succumbed to future shock?  I didn’t think so.  So perhaps Downs was on the money.

Now, I don’t want to pick on this post, but you will notice that under the guise of addressing a particular problem — alleged runaway liability for pension plan fiduciaries — it throws together a lot of data, most of which has very little to do with pension plan fiduciaries and some of which has nothing to do with much of anything.  The lead item of evidence is the Fulbright & Jaworski litigation survey from earlier this year, which I found somewhat lacking because it lumped insurance litigation (apparently including defense obligations pursuant to the terms of liability policies) with other commercial litigation.  It may be legit to include insurance coverage litigation in the mix of commercial lawsuits, but including insurance defense counts some things as commercial litigation that should not be counted, and counts other things twice that should only be counted once. The Lexis-Nexis survey of chief legal officers cited in the post seems off topic: does the fact that companies spend money on compliance mean a liability problem, when litigation itself is only third on the list of concerns?  Returning for a moment to the Fulbright & Jaworski survey, note that it calls its 111 responses to 422 inquiries "statistically significant," but is it really statistically significant of industry in general or just statistically significant of the total number of survey forms? Could it be the survey is best seen as an advertisement for Fulbright & Jaworski that contains some anecdotal evidence of possible but limited interest?  Does the fact that a given number of lawsuits happen, or that companies spend a given amount of money on them, actually tell us whether the lawsuits are a benefit or a hazard? For example, it is theoretically possible that lawsuits themselves are part of the competitive process, and that fear of lawsuits in some instances may produce greater efficiencies.   

I find that most writing on whether the amount of litigation is too great or too little suffers from the same defect as the post I linked to.  In fact, I’m sure you see this same thing every day in a variety of writings meant to persuade, ranging from corporate memos to legal briefs to the news articles in your local paper.  Citing disparate information and anecdotal evidence is not the same as proving a point, it’s using French housewives to make an exagger-point.   

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