Printer Friendly

Courts and the litigation crisis: where's the problem? Where's the solution?

AMERICA IS IN the throes of a litigation crisis. We know this because our vice president tells us so. Conveying to President Bush an Agenda for Civil Justice Reform in America, Vice President Dan Quayle states that "In the past thirty years, our legal system has become burdened with excessive costs and long delays." In a notable and widely publicized confrontation last year at the annual meeting of the American Bar Association, Mr. Quayle seemed to present himself to the rest of us as bearding the lion in his lair.

Professor Marc Galanter, who appears elsewhere in this issue, has been a leader in casting doubts upon the facts employed by the crisis-mongers, including Mr. Quayle and the President's Council on Competitiveness. It is quite clear that many of the common and glib assertions that we are engulfed by "hyperlexis" are grossly exaggerated. We have nowhere near 70 percent of the world's lawyers nor is our annual legal bill even close to $300 billion.

Moreover, and more important, it is even clearer that the arsenal of proposed changes that might substantially reduce litigation and its costs are mostly changes of a profoundly political character: they would change legal rights in significant ways, to the benefit of some and the corresponding detriment of others. In 1992 this is demonstrated in a practical way by the fate of the Vice President's "agenda." In a list of fifty recommendations intended to address the perceived national crisis, not one has yet generated significant congressional interest, in the course of a full year. Most of them are highly technical and limited, so much so that most are really irrelevant to any litigation crisis. Most of the proposals of the President's Council on Competitiveness deal only with federal litigation, and in rather minor ways. Marginal changes in the Federal Rules of Civil Procedure will not bestow upon us the competitive economy we all yearn for.


Beyond a certain point, it is not particularly an interesting or useful question whether there truly has been a litigation explosion. No more promising is the question whether the costs of litigation total a few tens of billions of dollars a year or hundreds of billions of dollars a year. If many or most of us believe that a problem exists, then it does. If, that is, the experience of those who encounter the litigation system (leaving aside, of course, the trial lawyers and other interested professionals) generally believe that it yields poor value, then this is a significant issue of public policy worth addressing. As Vice-President Quayle's experience suggests, useful and comprehensive solutions will always be in short supply.

It is the purpose of this article to lay out some of the interim solutions that are available and in place that readers of Business Economics can use. I think the useful starting point is to agree that anyone who has any responsibility for litigation, in any role, risks expense and delays that are obviously disproportionate. If for no other reason, this would be so because of the professional imperatives of the practice of law. A responsible and ethical lawyer is driven to explore every line of inquiry, even to turn over the last stone, in any legal task unless restrained by cost constraints. Preferably those constraints are exercised directly and forthrightly by a client. Quite independently, then, of the ordinary greedy motivations that drive any of us to maximize our business and our income, litigation lawyers are driven by professional responsibility and professional pride to run up their bills and the time they spend on any legal task, and they may even be sued if they fail to do so. It is the task of the courts and the clients to restrain them.


As a federal court administrator and previously a researcher on federal court practices and procedures, I want to highlight some long-standing yet evolving techniques for judicial management that have been invented and refined by courts. A structural reason the theory and practice of judicial case management is poorly understood is that it seems to conflict with a central tenet of the Anglo-American legal tradition: the disinterested and distant neutrality of the Anglo-American judge. While the judge in almost all other legal systems is investigator and active finder of facts, the Anglo-American judge is regarded as more passive, leaving investigation to the parties, both governmental and private ones. In our system, facts are found and cases are developed by the lawyers. Before recent decades, and today in England, India, and other places, until trial the judge knew and saw little or nothing of a case.

Beginning with the vast simplification of procedure embodied in the Federal Rules of Civil Procedure adopted in 1938, the federal courts rather unsystematically developed a contrary tradition that put the judge in the driver's seat in litigation. Rather modestly, the original 1938 rules provided for a pretrial conference at which preparation of the lawsuit would be considered, and the trial planned, by the lawyers in concert with the judge. Through the 1950s and 1960s, especially in response to massive and protracted litigation such as that resulting from the electrical equipment antitrust lawsuits, judges asserted, gained experience, and refined techniques to set demanding schedules, limit discovery (the process by which parties learn about each other's case and evidence), and limited and otherwise directed the scope of litigation.

My first boss in this field, the late Chief Judge Alfred P. Murrah of the Tenth Circuit and an early director of the Federal Judicial Center, used to quote frequently his own maxim that opens the Manual on Complex Litigation, a seminal document that resulted from his judicial training seminars that began in the late 1950s: "There are no inherently protracted cases, only cases that unnecessarily are protracted by inefficient procedures and management." Often characterized as a country preacher for federal judges, Judge Murrah never tried of exhorting his charges to take charge. "A dispute is private business when it's in a lawyer's office. It's public business when it's filed in federal court." The public, in short, holds the courts responsible for derelictions of lawyers, once an argument becomes a lawsuit.

The conflict between this kind of judging and the traditional notion of judicial neutrality naturally generated a degree of opposition. Over the past twenty years, however, it is surprising how little opposition there has been, considering the essentially unchecked power a life-tenured judge can have in deciding who will do what, and when, and how much of it, in each of the 400 or so civil cases each judge is assigned each year. In 1983 the pretrial rule was drastically overhauled and extended to embody a comprehensive theory of judicial case management. It became a requirement for the judge to set a tight schedule and control discovery in every case. Relying upon the findings of research done in federal and state courts before and after 1980, some of it done by this author, the authors of new Rule 16 require a comprehensive pretrial conference early in every suit to plan everything that is to follow. After that, if a case approaches a trial (a more common outcome than some would believe), a final conference is to be held in which the trial itself is mapped out and decisions made concerning most of its details. This theory of judicial case management, already receiving in 1983 the imprimatur of Congress through the statutory rulemaking process, has been reinforced and extended in the Civil Justice Reform Act of 1990, commonly known as the Biden Bill.

In the federal courts, what all this adds up to is a system that requires each one of the ninety-five federal trial courts to adopt and administer a plan for speedy and efficient resolution of civil cases. The new planning requirement of the Biden Bill is superimposed upon an increasingly aggressive practice of individualized case management and individual accountability. Judges are trained by the Federal Judicial Center, and within their own jurisdictions, to set individualized schedules tailored to the needs of each case, and to attempt to control the scope of inquiry, discovery, motions practice, and other aspects of case preparation along the way. Various statistical systems impose a highly significant, if little known, degree of accountability within courts and between courts. Regular reports show judges how their own case management efforts are working in relation to those of their colleagues.


Federal courts compare themselves with one another in a widely distributed publication called Federal Court Management Statistics. Management Statistics shows, for every district, a variety of comparative measures over a six-year period. This permits every judge and every court to compare their own performance to that of others in the quantity of work they face and their speed of disposition, among other factors.

The late Judge Hubert Will of Chicago used to train new judges at Washington seminars of the Federal Judicial Center by urging them to keep a watchful eye on their "profit and loss statement." This is a monthly report distributed within most federal courts that shows for each judge the number of cases pending at the beginning of the month, the number of cases assigned, the number terminated, and the number pending at the end. Since each judge receives over the long haul essentially the same number and the same mix of cases with regard to relative difficulty, the pending column by judge constitutes a kind of continuing experiment. A judge whose total number of pending cases is consistently low has confirmation that his case management efforts are relatively effective; judges at the high end seek the advice of others, or make excuses, or most commonly do both.

Some might think that the emphasis herein on accountability is peculiar, in a system in which judges are appointed for life and can only be removed by impeachment, and trial by the U.S. Senate, for "high crimes and misdemeanors" under the Constitution. Of course, it is true that a federal court cannot discipline its judicial failures by firing them, or docking their pay (also constitutionally protected) in the way ordinary employers can.

I submit that opportunities for accountability are greater rather than smaller than might be imagined, by comparison with other professional organizations like universities, hospital medical staffs, or law firms. The qualitative aspects of a judge's work are readily evaluated in a qualitative fashion because their work is highly public and published. Fortunately, this does not need to be done as a matter of management accountability, because the appeal process provides not only a remedy for poor quality, but one that is public and potentially embarrassing. If a judge does poor quality work, it is certainly not because management tools are unavailable to demand the best quality the judge is capable of. Generally it is because the selection process failed. On the quantitative side, the "profit and loss statement" is a highly effective management tool for motivating professional pride. A judge who is persistently below the norm is not only a professional embarrassment to his or her colleagues, but also a drain upon their own resources, as they are called upon to assist. I note in passing that there are various other quantitative reports that address other aspects of a judge's work. Too numerous to detail here, these reports ordinarily are similarly successful in mobilizing professional pride to useful effect.


A major emphasis of the Biden Bill is planning that incorporates mechanisms for alternative dispute resolution. The planning process maintained now by statute has led federal courts throughout the country to establish relationships with such professional bodies as the American Arbitration Association to arrange for early neutral evaluation of the merits of newly filed civil suits and try to achieve a settlement informally.

These plans and procedures, of long standing in some jurisdictions, now have the formal blessing of Congress as a program of the judiciary. Similar programs in the United States Courts of Appeals have been in place for some time, for twenty years in the case of my own Second Circuit, in New York. All emphasize the central notion that a settlement is not only the quickest and readiest resolution of a dispute, it is also ordinarily the most final. A settlement cannot be appealed, although it can sometimes unravel if the parties change their minds. Most important, a settlement ordinarily embodies a commitment by the parties to work together in the future.

Settlement as a goal of judicial management, however, has drawn severe fire to judicial case management programs. In my view, the only substantial attack on this form of judicial activism is the claim that too many judges become too personally involved in details of settlement negotiations, in ways that upset their neutral stance. The judge who attempts to persuade either side to modify a settlement offer must do so largely by referring to perceived merits and demerits of the parties' germinative cases as they develop. If negotiations ultimately fail, that judge can hardly be perceived as neutral, and may not be so in fact.

This is not a difficult problem either for the planning process under the Biden Bill or for court administrators. Settlement is an essential and central goal of judicial management that must be separated from the other components of case management, or at least from the trial process. One way is to bring in outside arbitrators. Another is to place all case management in the hands of magistrate judges (not life tenured constitutional officers) who are appointed by the court. This insulates the ultimate trial judge entirely. Short of this, and better, the judge can use the magistrate for settlement discussions while retaining control, or can participate fully and freely in settlement discussions but then turn the case over to another judge if negotiations fail. There are many solutions, and I believe that the problem is normally handled satisfactorily and appropriately.

Ironically, the academic attack on settlement initiatives has been accompanied by a public demand for them. The political force behind the Biden Bill was largely a perception that federal and state courts do too little to encourage settlement.

Another important case management component that has developed over the past generation or so is to bring large numbers of cases together for common resolution. Professor Judith Resnik has described this as the movement from "cases" to "litigation." Class actions can lump together the claims of dozens or even thousands or millions of different claimants, where the claims are sufficiently similar and a judicial decision is made that common questions predominate. The Judicial Panel on Multi-District Litigation can act formally to consolidate in a single court the claims of diverse parties in diverse jurisdictions that involve similar facts and that may turn on the same legal judgments. And nearly every court has a "related case rule" by which cases are more or less automatically assigned to the same judge if they are related to one another. Professor Galanter has ably shown that devices of this kind are a real triumph of our system of litigation, by comparison not only with other countries today, but with our own system a generation or two ago.

Oddly enough, a proposal that recurs in reformist literature is for flexible assignments of trial judges. For example, the President's Council on Competitiveness proposes that "judges from less busy districts should be assigned to districts where there is a more crowded docket." This is such a good idea that it is done routinely. To propose legislation for the purpose is a bit silly, although it may help deflect the common charge that judges are off on junkets. (This charge is rarely made when a judge of the Southern District of New York volunteers for the exhausting February motions term in Utica, N.Y., or a Los Angeles judge takes on a major winter trial in Anchorage; it is often heard when judges of many jurisdictions travel to the Virgin Islands, where both of the two judicial positions have been unfilled since 1989.)

Within each circuit the chief judge has the power to reassign judges from city to city. Among the circuits, this power rests with the Chief Justice of the United States. Reassignments are common, especially to courts that have experienced a sudden increase of workload with no increase in judicial personnel, and to courts that have experienced long or numerous judicial vacancies.

I close this part of my discussion with a defensive caveat. The acute reader will have noted that I focus on what I know, the federal courts, omitting real discussions of state courts where most litigation takes place. Much of the above has been influential in many state courts, though few or none approach the federal median of nine months for closing the typical civil case. Federal statistics are much more informative, though research on state courts is improving. The biggest difference, suggested earlier, is that only federal judges hold life tenure. They can safely jerk lawyers around by setting tight deadlines and enforcing them.


As a polity, and as a practical political fact, it seems that we are not serious about the "litigation explosion." If we were, there would be ready acceptance of "loser pays" legislation, which I regard as the precise test of our seriousness on this point. Most legal systems make the losing litigant pay most or all of the winner's costs. The fact that we don't reveals a big fact: in reality, we are quite prepared to encourage litigation.

As a polity, we are concerned about access to the legal system, so we facilitate it. Having done so, we find ourselves saddled with the system Mr. Quayle complains of. He has made a modest "loser pays" proposal, as others have. All such proposals, numerous and diverse as they are, are enormously controversial with regard not only to operations and detail but as to conception as well.

Moreover, there are abundant statutes and practices that have the opposite intent and effect. Under the federal Equal Access to Justice Act, for a single example, a winning plaintiff is entitled to government compensation if it can be proved not only that the government was wrong to resist a lawsuit, but that it was very, very wrong. Statutes of this sort, facilitating access to the courts, obviously are not inherently undesirable; they only become undesirable if the societal burden of litigation is unbearable.

Policymaking is a tricky business when the legal system is at issue. The legal system seems to have a peculiar bent to generate questions of the character: "How much does it hurt?" We only want to shut off access to the courts, or drop public funding for legal services (what little remains of it) if it hurts very much indeed. Questions of this kind are peculiarly difficult for social scientists or others of a quantitative bent to answer in a satisfying way, but they are not so hard at all for politicians to answer. If the pressure becomes too much to resist, the legislator will stop resisting.

The rest of us must take the system as we find it. As judges and courts struggle with litigation as it has exploded upon them case by case, litigants or clients or customers must struggle as best they can to contain costs and control delays. There has been a considerable movement over the past twenty years for clients to second-guess lawyers on bills, especially litigation bills. Some litigation by major corporations is done in-house, something that was unheard of previously. And in-house lawyers never accept a "for services rendered" unitimized bill. The trick seems to be to control what lawyers do without paying too much to other lawyers (to supervise).

Global change seems unlikely in our litigative system but marginal change -- possibly a bit more than that -- seems probable. Substantial pending revisions to the Federal Rules of Civil Procedure would, if successful, make discovery "self-executing," and simpler and cheaper. There are significant moves toward privatization, and installation of private alternative dispute resolution mechanisms. It is even possible that large chunks of tort litigation, especially products liability, will be federalized. While we watch the unfolding of these large public policy issues, those of us who participate in the litigative process in a practical way have a responsibility to seek out every opportunity to manage costs and mitigate delays.

Steven Flanders is Circuit Executive for the federal courts of the Second Circuit (Connecticut, New York and Vermont).
COPYRIGHT 1992 The National Association for Business Economists
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Author:Flanders, Steven
Publication:Business Economics
Date:Oct 1, 1992
Previous Article:Setting the record straight: facts about litigation costs and delay.
Next Article:A beginner's guide to the litigation maze.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters