The following excerpt is reprinted with permission from a new book, The Prince, written by Mr. Billingsley. The book contains his ideas, thoughts, and recommendations on the present economic crisis.

Legal Costs & Impact Are 300% Too High

By Chester Billingsley

In 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.

The 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 http://www.amazon.com.

(Disclosure: Bob Meyer owns Mentor Capital stock.)