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Why You Won’t Get Your Day in Court
Jed S. Rakoff
The New York Review, November 24, 2016
Over the past few decades, ordinary US citizens have increasingly been denied effective access to their courts. There are many reasons for this. One is the ever greater cost of hiring a lawyer. A second factor is the increased expense, apart from legal fees, that a litigant must pay to pursue a lawsuit to conclusion. A third factor is increased unwillingness of lawyers to take a case on a contingent-fee basis when the anticipated monetary award is modest. A fourth factor is the decline of unions and other institutions that provide their members with free legal representation. A fifth factor is the imposition of mandatory arbitration. A sixth factor is judicial hostility to class action suits. A seventh factor is the increasing diversion of legal disputes to regulatory agencies. An eighth factor, in criminal cases, is the vastly increased risk of a heavy penalty in going to trial.
For these and other reasons, many Americans with ordinary legal disputes never get the day in court that they imagined they were guaranteed by the law. A further result is that most legal disputes are rarely decided by judges, and almost never by juries. And still another result is that the function of the judiciary as a check on the power of the executive and legislative branches and as an independent forum for the resolution of legal disputes has substantially diminished—with the all-too-willing acquiescence of the judiciary itself.
Some of this may seem surprising to people accustomed to hearing about overburdened courts with overcrowded dockets. These very real burdens partly reflect the decades-old refusal of many legislatures to provide funds for new courts and new judges at a rate remotely comparable to the increase in population and the corresponding increase in cases. But aside from these facts, a closer look at changes in the courts’ dockets reveals some disturbing trends.
Until 1970, according to statistics compiled by the National Center for State Courts, the great majority of individuals who brought or defended lawsuits in state courts were represented by lawyers. But today as many as two thirds of all individual civil litigants in state trial courts are representing themselves, without a lawyer. Indeed, in some states, an astonishing 90 percent of all family law and housing law cases—which are the most common legal disputes for most Americans—involve at least one party who is not represented by a lawyer.
Individuals not represented by lawyers lose cases at a considerably higher rate than similar individuals who are represented by counsel. In mortgage foreclosure cases, for example, you are twice as likely to lose your home if you are unrepresented by counsel. Or to give a different kind of example, if you are a survivor of domestic violence, your odds of obtaining a protective order fall by over 50 percent if you are without a lawyer. While hard statistics are not available for every kind of case, surveys of state and federal judges repeatedly show that they are quite certain that parties unrepresented by counsel fare far worse than those who are represented by counsel, even when the judge tries to compensate for counsel’s absence.
This is hardly surprising. Unlike most European legal systems, the American legal system is an “adversary system,” where, in Chief Justice John Roberts’s words, the judge simply serves as an “umpire” determining which of the contestants has won the match. While the analogy may be overstated, the fact remains that very few laypersons, lacking a lawyer’s legal education or familiarity with the intricacies of modern law, can hope to compete with a party represented by a lawyer. As a practical matter, such unrepresented litigants are effectively denied a fair day in court.
This is bad enough when the unrepresented litigant is a plaintiff who has chosen to go to court without a lawyer because she cannot afford one. But increasingly, the unrepresented parties are defendants who were hauled into court by institutions well supplied with lawyers. For example, the most immediate impact of the Great Recession on the courts was a huge increase in foreclosure proceedings brought by banks and other mortgage lenders against those who had defaulted on their mortgages. These hapless homeowners, who in many cases had been inveigled by mortgage brokers into taking out excessive mortgages on which they inevitably defaulted, were now facing foreclosure without remotely having the money to retain a lawyer to defend them.
Despite the recent improvement in the economy, this peril persists. In New York State, for example, almost one third of all state court civil cases brought in 2015 were foreclosure actions; and in these, despite increased efforts by public interest groups to provide legal representation, nearly 40 percent of the defendants still were unrepresented. The same trend can also be seen in eviction proceedings brought against tenants. In New York City’s Housing Court, for example, 70 percent of tenant defendants who were sued in 2015 were unrepresented by counsel.
More generally, most observers agree that the primary reason so many Americans are unrepresented in court is that even people of moderate means simply cannot afford a lawyer. The provision of legal services has never operated according to free-market principles. Lawyers comprise a guild to which there are significant barriers to entry, not least the huge expense of a legal education. But in the past few decades, the price of hiring a lawyer to handle an everyday dispute has risen at a rate much greater than the average increase in income or wages. Thus, between 1985 and 2012 the average billing rate for law firm partners in the US increased from $112 per hour to $536 per hour, and for associate lawyers from $79 per hour to $370 per hour.
These billing rates increased at more than three times the rate of inflation during the same period.
Economists differ about the reasons for this large increase in the price of legal help. But among the causes is a great increase in legal specialization. A corollary is that the “family lawyer” has become even more rare than the “family doctor.” But whereas the ordinary American can usually get decent health care under insurance provided through his employer or, more recently, the state, affordable legal insurance remains a rarity. The result is not only that a very large number of Americans who go to court, or are hauled into court, are unrepresented by counsel, but also that an unknown but probably even larger number of Americans who might otherwise seek legal redress for wrongs done to them simply cannot afford a lawyer and choose instead to forgo justice altogether.
Further still, even those individuals who can afford counsel rarely get their day in court. Rather, in the overwhelming majority of cases, they settle with their adversaries before the merits of their cases ever get heard. This is true even in federal courts, where, because of lighter dockets, there is much less institutional pressure to settle. Nevertheless, whereas in 1938 about 19 percent of all federal civil cases went to trial, by 1962 that rate had declined to 11.5 percent and by 2015 it had declined to an abysmal 1.1 percent. Although the data for state civil cases are less ample, it appears that in state courts the situation is even worse, with fewer than 1 percent of them now going to trial. And while it is true that some of the remaining 99 percent of cases are resolved by motions made in court and accepted by a judge, in the majority of cases the parties simply settle without any judge or jury reaching a decision on the merits.
To be fair, the pretrial settlement of a legal dispute is often a desirable result, and state court judges with their heavy dockets actively encourage settlement. But the fact that civil cases are being settled at an ever greater rate suggests that something else is bringing pressure to settle, and it is probably the great expense of litigation. The United States, for example, allows pretrial discovery—that is, obtaining of documents, conducting of depositions, and the like—to a degree that far exceeds that of any other legal system in the world. While designed to achieve the laudable goal of preventing “trial by ambush,” such broad discovery has proved to be excessively expensive. It thus not only places impecunious parties at a disadvantage but, again, also discourages ordinary people from bringing meritorious lawsuits in the first place.
A special case in point is certain kinds of common tort cases in which the American legal system has tried to mitigate the high cost of legal representation by allowing lawyers to enter into contingent-fee arrangements with their clients. Under these arrangements, the client does not pay the lawyer anything if the case is lost; but if it is won or settled, the lawyer gets to take a substantial percentage of the winnings or settlement fund as his or her fee.
The contingent-fee arrangement, however, has proved to be a limited cure, at best, for the problem of everyday Americans who cannot afford legal services. For one thing, contingent-fee arrangements only benefit those impecunious parties who are suing rather than being sued. Also, under the legal ethics rules of most jurisdictions, a plaintiff who brings a case on a contingent-fee basis is still personally responsible for paying for the costs of the lawsuit other than the attorney fees, and those costs frequently amount to thousands of dollars. Moreover, because the contingent-fee lawyer must hedge his bet by taking on a considerable number of cases, contingent-fee arrangements only operate in situations where the same kind of tort, such as a personal injury caused by a slip and fall on the sidewalk, recurs frequently and predictably. It also is widely believed, not just by defendants but by many judges, that the contingent-fee arrangement encourages extortionate or even fabricated lawsuits.
Most importantly, the time-consuming nature of modern litigation means that most contingent-fee lawyers will simply refuse to take on a case that does not promise an award or settlement of at least several hundred thousand dollars, leaving those tort victims who cannot sue for large amounts unable to have a day in court.
Another way in which the average American used to be able to afford a lawyer was by having one provided by an organization to which that person belonged, most commonly a union. But over the past few decades, the percentage of unionized workers in the private sector has steadily declined, and by 2015 it was down to 6.7 percent, a small fraction of the private workforce. So while the benefit of union-paid legal representation is still available to many government workers, it is largely unavailable to those in the private sector.
In addition to being priced out of legal services, many Americans, even those who could afford a lawyer’s fee, are increasingly being forced to agree to one-sided contracts that prevent them from going to court altogether. For example, employees in an ever-growing percentage of the workforce must agree, as a condition of their employment, to contractual provisions that mandate that any legal disputes related to their employment be decided by a private arbitrator. Similarly, consumers who purchase goods or services online are increasingly subject to terms and conditions unilaterally drafted by the sellers’ lawyers that provide, among much else, that they must forgo their legal right to go to court, as well as their constitutional right to a jury, and instead have any and all disputes with the seller decided by a private arbitrator.
The private arbitrator not only is typically chosen and paid for by the employer or the seller, but also is free to proceed with little or no regard for the ordinary rules of evidence and to decide the dispute without giving any reasons for the decision. The arbitrator is limited, however, in the relief she can afford employees or consumers even if she should find in their favor. So, for example, the company-imposed agreements that mandate arbitration typically also prohibit an award of punitive damages or the convening of a class action that would include others who have the same or similar complaints.
The latter is particularly significant, since the class action is one of the few devices that the American legal system has developed to offset the high cost of legal services. In particular, if numerous people suffer the same injury as a result of a company’s misconduct but no one person suffers an injury sufficiently large to offset the cost of hiring a lawyer, one or more of the injured parties can sue on behalf of the entire class of injured parties, making the case sufficiently lucrative for a lawyer to want to pursue it and making the outcome, if it is favorable to the plaintiff, sufficiently serious to have a deterrent effect on the company. But the class action suit—which most companies view with everything from skepticism to dread—is not available in a case before an arbitrator if the underlying agreement expressly prohibits class actions, as most such contracts increasingly do.
These agreements foisted on employees and consumers are what the law calls “contracts of adhesion,” i.e., one-sided contracts imposed on weaker parties who have no realistic ability to negotiate, let alone contest the terms. But this has not deterred the courts, and especially the federal courts, from enforcing them. Thus, for example, in 2011, the US Supreme Court, in a 5–4 decision in the case of AT&T Mobility LLC v. Concepcion, effectively overruled the determination by the California Supreme Court that certain contracts of adhesion that mandated arbitration and prohibited class actions were unconscionable and unenforceable. The court held—in an opinion by the late Justice Antonin Scalia—that the California court’s decision must give way to the supposed federal policy favoring the speed and efficiency of arbitration—as if, for example, the right to a jury trial guaranteed in federal civil cases by the Seventh Amendment (and in state civil cases by the constitutions of all but three states) were simply some outmoded procedure that could be forfeited in the interest of saving time.
The Concepcion case has attracted much criticism because of what some legal commentators view as its strained reasoning, which they typically ascribe to the pro-business slant of the Court’s majority when Scalia was part of it. But its relevance here is to illustrate the lengths to which the courts themselves are prepared to go in restricting Americans’ access to their own courts.
Buttressed by such decisions, companies have widely imposed mandatory arbitration clauses on their employees and customers, so as to deny them access to the courts, as well as to exclude them from exercising their constitutional right to a jury. In addition, since the Concepcion decision, most such clauses also forbid people with complaints to bring class action claims, even in arbitration.
It is not just the courts that are to blame for limiting access to the courts. Congress, under both Democrats and Republicans, has enacted many kinds of laws restricting such access. An extreme example is the Antiterrorism and Effective Death Penalty Act, enacted with bipartisan support in 1996, which severely restricts the ability of a state prisoner to obtain the federal judicial review of his conviction that historically is embodied in the writ of habeas corpus.
But a less-noticed example that actually affects many more average citizens is Congress’s increasing delegation of judicial powers and responsibilities to administrative agencies. Without any obvious support from the Constitution, these agencies, which are branches of the executive, then create their own internal courts, with procedures that bear little resemblance to those found in the judiciary. Furthermore, these administrative courts are run by judges who are selected by, paid by, and subject to review by the administrative agencies themselves. Yet Congress, often at the behest of the president, has given increasing powers to these courts, whose independent status is often doubtful.
For example, the Dodd-Frank Act of 2010 greatly expanded the powers of the Securities and Exchange Commission’s administrative courts, including their power to impose severe monetary penalties on individuals. The SEC in turn has increasingly brought more of its important such cases in its administrative courts, where, not surprisingly, its rate of success is considerably greater than its success rate in federal courts. Thus, in the years between 2010 and 2015, the SEC won 90 percent of its cases in its administrative courts, compared with 67 percent of its cases in federal court.
For its part, the Supreme Court has greatly limited its effective review of these administrative courts. In particular, the Court’s 1984 decision in Chevron USA v. Natural Resources Defense Council, which severely limited the scope of judicial review of administrative regulations, has been extended to similarly limit judicial review of the decisions of administrative judges in any case where the administrative agency has itself affirmed the decision of its administrative court, which it almost always does. The overall effect, once again, is to deprive ordinary people of meaningful access to regular courts.
While US citizens thus no longer have much real access to their courts in many civil and regulatory matters, you might think they would still have meaningful access in criminal cases, which are beyond the jurisdiction of any administrative court, let alone private arbitrators. But in reality, the real decisions in criminal cases are made by the prosecutors, not the courts. This is because, as a result of draconian and often mandatory penalties imposed by both Congress and most state legislatures during the last decades of the twentieth century, it is much too risky for any defendant, even an innocent one, to go to trial.
Instead, over 97 percent of those charged in federal criminal cases negotiate plea bargains with the prosecution, and in the states collectively the figure is only slightly less, about 95 percent.
In most cases, as a practical matter (and sometimes as a legally binding matter as well), the terms of the plea bargain also determine the sentence to be imposed, so there is nothing left for either a judge or a jury to decide. While the immediate result is the so-called mass incarceration in the United States that has rightly become a source of shame for our country, the effect can also be seen as just one more example of the denial of meaningful access to the courts even in the dire circumstances of a criminal case.
Can anything be done about this increasing denial of access to the courts? A number of solutions have been proposed, ranging from state-sponsored legal insurance to a guarantee of counsel to indigent civil litigants to lawyer-subsidized provision of cheaper legal services for ordinary Americans. But none of these solutions would come easily. For example, Jonathan Lippman, the recently retired chief judge of New York State’s highest court, has strongly advocated a right to counsel in civil cases similar to the right to counsel constitutionally guaranteed in criminal cases. But in New York, at least, this would require, according to Lippman, an amendment to the state constitution, a difficult change to bring about. And given the controversy over Obamacare, one can only imagine the difficulties that would attend any effort at the federal level to provide state-sponsored legal insurance. More generally, given the current gridlock in Congress and the history in state legislatures of short-changing legal aid groups, one cannot be very optimistic about any legislative solutions in the short run.
But while the larger solutions to this denial of access must await a change in the legislative climate, there is, I am convinced, no reason short of ignorance or ideology for judges to continue to give their approval to devices that effectively deny Americans access to their courts. The Supreme Court, for example, could easily overrule or at least narrow decisions like Concepcion and Chevron, on the ground that they deprive Americans of meaningful access to their courts. And lower court judges, state and federal, could take a harder look at some of the practices described here that have the same effect.
This would require a considerable change of thought on the part of many judges. Indeed, it is hardly surprising that judges who often have substantial dockets tend to look favorably on arrangements that will lessen their work burden, whether by mandatory arbitration, denial of jurisdiction, reliance on prosecutors and administrators, or similar measures. Too often, however, such relief morphs into an effective reduction of judicial responsibility, with dire consequences for the long-term ability of the courts to serve as an effective check on the power of the legislature and the executive. Arguably even worse, the situation I’ve described reinforces the belief of citizens that the courts are not an institution to which they can turn for justice, but are simply a remote and expensive luxury reserved for the rich and powerful. If the judges themselves do not take steps to counter this insidious trend, who will?
=Jed S. Rakoff=
November 24, 2016