If you’re a single-digit millionaire like Hulk Hogan, you have no effective access to our legal system.
Peter Thiel
If I didn’t have some money, I would have no chance at all.
OJ Simpson
A patent troll is a company formed for only one purpose—to purchase patents and assert them broadly against real, productive companies. The point isn’t whether their patents are infringed and/or invalid. A perverse incentive structure encourages trolls to bring lawsuits against numerous companies and demand nuisance settlements—settlements well below the millions of dollars it can take a company to protect themselves and defend a patent infringement case.
Cloudflare
Picture this. You find yourself in Xanadu, embroiled in a legal battle. Unlike America though, Xanadu has a very curious legal system. They have gotten rid of lawyers entirely… and have instead legalized courtroom bribery. When finding yourself in any courtroom, you are allowed (and expected) to bribe the judge in exchange for a favorable review.
Bribe the judge a reasonable amount, and you can expect to get a fair hearing on the merits of your case. Bribe the judge an exceedingly large amount, and you can expect a judge who is more sympathetic to your arguments. Bribe the judge a minimal amount, or refuse to bribe the judge at all, and you will find yourself facing an uphill battle, for any non-trivial case.
Outraged? You definitely should be. That hardly sounds like justice. Think it will never happen here in America or the “civilized” world? Think again. The exact same dynamic is fully on display here everyday… though the injustice is covered up far more tactfully.
The average cost of good legal representation for a murder trial, is over $100,000. The average cost for a business to defend itself against a patent troll is over $1 million. And suing a major corporation can cost a staggering $140 million.
It is possible that anyone paying the above amounts is a fool who enjoys throwing their money away. More likely however, they are well aware that you simply cannot get a fair hearing in the legal system, unless you’re willing to spend significant sums of money on good legal representation. Or more cynically, that you can tilt the legal system in your favor, simply by spending gobs of money on excellent legal representation, expert witnesses, jury consultants, and innumerable other resources that give you a leg up in court.
Nowhere is this on better display, than in Hulk Hogan’s lawsuit against Gawker. Even as a famous multi-millionaire, Hulk Hogan knew better than to take on a powerful corporation like Gawker. Until, that is, he found himself backed by an even more powerful billionaire (Peter Thiel) who had his own personal grudge against Gawker. To quote an article speculating on this topic before Thiel’s involvement became known:
Watching the fascinating, graphic and often embarrassing testimony of Hulk Hogan in his lawsuit against Gawker, I couldn’t help wonder, how the heck did this case not settle? … there is a reason this is the first case to ever go to trial over a celebrity sex tape. Taking a lawsuit like this to trial is enormously, sometimes prohibitively, expensive for both sides. This one in particular, has been a legal fee fiesta for almost four years with numerous complex issues litigated in multiple venues both federal and state. I wouldn’t be surprised if at the end of this trial the costs were roughly $3 million. Each. That includes pricey experts travel and overpriced (but seemingly excellent) attorneys. And that is before any possible appeal.
There were multiple mediation/settlement discussions and Gawker must have offered to pay significant damages (neither side would discuss numbers). After all, Gawker’s insurance isn’t covering the costs and many have described it as a potentially existential crisis for Gawker Media. In fact, this suit forced Denton to take the draconian measure of raising money, for the first time, just to help fund the defense and any possible judgment.
So why would Hogan reject what must have been multi-million dollar offers? More importantly, what happens if Hogan loses? Who pays his side’s enormous fees?
If the above sounds like an amusing battle between the rich and famous, it is certainly also an issue that affects both you and me.
She was an Indonesian domestic helper who earned S$600 a month working for an extremely wealthy Singaporean family. One day, his family accused her of stealing from them. They reported her to the police – triggering what would become a high-profile court case… Earlier this month, Parti Liyani was finally acquitted… But her case has prompted questions about inequality and access to justice in Singapore, with many asking how she could have been found guilty in the first place.
In 2019, a district judge found her guilty and sentenced her to two years and two months’ jail. Ms Parti decided to appeal against the ruling. The case dragged on further until earlier this month when Singapore’s High Court finally acquitted her.
The case has also highlighted the issue of migrant workers’ access to justice. Ms Parti was able to stay in Singapore and fight her case due to the support of the non-governmental organisation Home, and lawyer Anil Balchandani, who acted pro bono but estimated his legal fees would have otherwise come up to S$150,000.
Luckily the above story has a happy ending as an unjust conviction was overturned on appeal… but only because of a noble lawyer who was willing to donate $150,000 worth of legal services. One wonders how many other convicts sitting in prison today would be free, if they too were able to afford similarly expensive lawyers. Or at least that’s what I wondered, until I realized someone had already done a study on this very topic:
Suppose the 2,459 defendants in our sample represented by appointed counsel had been represented instead by Defender Association counsel? Based on the results in Table 2, we would expect 270 defendants who were convicted of murder to have been entirely acquitted of this charge with Defender Association representation, and 396 individuals who received life sentences would have been spared a life sentence.
We might have expected defense counsel to make the least difference in murder cases because the state expends the most resources and has the highest stakes in a reliable outcome. In fact, we find that counsel makes a vast difference in the outcome of murder cases. Our qualitative interviews suggest that the causes of this disparity are incentive structures created by the appointment system and a resulting failure of appointed counsel to prepare cases as thoroughly as the Defender Association. Effective counsel is a prerequisite to the assertion of nearly every other right. As the Supreme Court observed, “it is through counsel that all other rights of the accused are protected: Of all the rights that an accused person has, the right to be represented by counsel is by far the most pervasive, for it affects his ability to assert any other right he may have“
Ideally, the vagaries of counsel should make no difference in the outcome of a proceeding in our justice system. Our findings show how far from this goal we are.
In an ideal world, judges, juries and the legal system as a whole, would be wise enough to rule purely on the merits of the case, regardless of how expensive or poor the legal representation might be. In an ideal world, no one will ever need to spend hundreds of thousands of dollars (let alone millions and tens of millions) on legal expenses, because everyone would know that an army of Ivy League lawyers will not sway the outcome of the case by even one iota.
I would love to live in such an ideal world, but that is clearly not the world we live in today. To put things in perspective, during the IP lawsuit waged between Oracle and Google, the two corporations spent tens of millions of dollars on legal fees. And attorneys who represent the privileged in murder trials, make 4 times more than the court-appointed lawyers who are defending the general public. Anyone who thinks that spending gobs of money on lawyers and expert witnesses won’t help you in the courtroom, is delusional.
A Radical Proposal
There are many incremental solutions that would help ameliorate the current dysfunctional legal system. For instance, better funding for public defenders, and harsher penalties for frivolous lawsuits. These proposals should certainly be given close consideration, even if they do not resolve the problem fully. But today, I’d like to discuss an even more radical proposal that will completely abolish the financial bias in the courtroom.
Anytime one party in a legal battle wants to spend more money than the other, they should be required to subsidize the other party’s legal expenses by a similar amount.
Ie, if you’re a broke bricklayer who has been accused of a crime, and find yourself being prosecuted by a high-profile District Attorney who is making $150,000/year, the state should be obligated to pay for your equally expensive defense lawyer.
If you’re a billionaire who has been accused of sexual assault, and you spend $20 million on the best possible legal defense, you should be obligated to give the District Attorney’s office and your accusers millions of dollars as well, so that they can mount an equally strong case.
If you’re a common man who has been wronged by a big corporation, and the corporation responds to your lawsuit with an entire phalanx of lawyers attempting to drown you in paperwork, they should be required to fund your own equally expensive legal team to respond in kind.
And if you’re a small-medium business being sued by a big corporation, or an amply resourced patent troll, your accuser should be required to pay for your legal defense as well, instead of simply intimidating you into submission with the threat of legal expenses.
A Better World
If you’re a libertarian, such a proposal would sound absolutely ridiculous. “If I worked hard and earned a billion dollars for myself, why shouldn’t I have the right to spend millions of dollars on expert legal representation? And why on earth should I be obligated to subsidize my adversary’s legal expenses?”
I’m sure the libertarians on Xanadu would also find the idea of outlawing bribery to be equally bonkers.
The goal of the justice system though, is not to enforce Libertarian ideals and philosophy. The goal of the justice system is to enforce Justice. Equally and fairly. Regardless of how rich or poor either party might be.
It is tempting to think that the above proposal strips people and companies of their right to mount a vigorous legal prosecution or defense. In reality, it does no such thing. Billionaires and big corporations and patent trolls would still be allowed to hire all the best lawyers they want, in order to present their side of the case as thoroughly as they choose. The only difference is that under the above proposal, their opponents would get the same opportunity to mount an equally rigorous case.
Billionaires and mega-corporations would find themselves facing an equally well resourced opponent on a level playing field – no more, and no less. If a lawsuit is found to be completely baseless, the courts can always order the offending party to pay for all legal expenses involved – something that would effectively prevent nuisance lawsuits.
It is also tempting to think that such a proposal would lead to an explosion in legal expenses. In reality, the opposite would occur. Legal expenses today are an arms race between the two adversaries. Both sides would prefer for everyone to spend less money, and keep expenses low. But both sides also feel compelled to outspend the other, in order to gain an advantage (or not be disadvantaged) in the courtroom. It is this dynamic that leads to ever-increasing legal expenses in the courtroom.
The above proposal, however, upends this arms race completely. Spending more money will not, in itself, give anyone an advantage. After all, they would then be required to subsidize their opponent’s legal expenses. Given this fact, both sides would only spend additional money on legal expenses, if they felt that it was genuinely necessary to present the merits of their case. No more and no less. Frivolous motions and paperwork would be avoided by both sides, since they both know it will do them no good.
I’ll be the first to admit that I do not have all the answers, and there are many nuances in the above proposal that still need to be ironed out. But the very least we can do is acknowledge the dysfunction of the legal system we abide by. Justice that favors the wealthy, is no justice at all.
Outlook Zen 