The following excerpt
is reprinted with permission from a new book,
written by Mr. Billingsley. The book contains his ideas, thoughts,
and recommendations on the present economic crisis.
Legal Costs & Impact Are
300% Too High
much of the developed world that we compare ourselves to, legal
costs are approximately 1% GDP. In the United States they are around
3%. The extra 2% has not improved our justice or equity as compared
to Japan or England. Much of the extra drives lawsuits that transfer
wealth from productive businesses to non-producing litigants, with a
healthy slice for the bar.
Solutions include (i) having the loser pay the winner�s legal costs
to the extent of the loser�s costs, (ii) eliminating contingent fee
award sharing, (iii) allocating proportional liability rather than
fishing for deep pockets, (iv) valuing a life at $5 million, with
injuries proportionally down from that, (v) awarding punitive
damages to the state, and (vi) paying lawyers when, as and if
clients are paid. Granting them in coupons, if that is what is
awarded, and not paying on the potential pool, rather on the smaller
splash that actually collect.
negative impact to society is larger than the extra 2% because
litigation is often used to delay productive development or
programs, and so many decisions are driven by fear of lawsuit. We
estimate that the extension of generation to generation economic
doubling of prosperity is pushed out by one year because of the drag
from excessive litigation and its consequences.
Society would benefit if legal actions were conducted much like
arbitration. This preferred method of alternative resolution should
be an embarrassment to the judiciary, and to the legislative branch
to the extent that they are the lawyer legislators that created the
laws that confer rights that have brought us to this point.
After other things are well accomplished, and in the President�s
spare time, we would all appreciate him eliminating the incentives
that help make us such a litigious society.
Chet Billingsley did his undergraduate work at West Point. He
attended Harvard where he received a Master�s Degree in Applied
Physics with concurrent study at Harvard Business School and MIT�s
Nuclear Engineering Department. He spent the major portion of his
early career at General Electric in the energy and high tech sector
in project turn-around and international management positions.
Currently, Billingsley is the CEO of Mentor Capital (Symbol:MNTR).
For more information on Mentor Capital see: http://www.MentorCapital.com.
�The Prince� by Chet Billingsley can be purchased at
(Disclosure: Bob Meyer
owns Mentor Capital stock.)