Ask Howard Treesong About Law or Lawyering

[Howard Treesong]

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wrt the MSFT anti-trust case like, 8 or 9 years ago? It was about MSFT bundling IE with Windows versus people having to pay for Netscape. I didn't understand why MSFT lawyers never presented the case as a water company offering water freely available to drink as part of your water bill (IE) versus people buying bottled water to drink (Netscape). No one's ever sued the water company for giving away water that people could buy... That analogy seems apt to me and I don't understand why it wouldn't be applicable...?

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Other than the main allegation you articulate above (which is called a "tying" claim because the downstream product is "tied" to a monopoly in the upstream market), I didn't follow much of the Microsoft antitrust litigation. I always thought that tying claims shouldn't create antitrust liability unless it can be shown that consumers are hurt, as Robert Bork explains in his fine book "The Antitrust Paradox." I don't know why Microsoft didn't pitch it the way you say, although to me that's reflective of a much deeper problem than just their approach to it.

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Frivolous lawsuits (& the costs of defending/settling them) are oftentimes identified as a key driver of insurance premiums. I don't expect that you to be subject-matter-expert in this space, but from your view of the elephant, are they? If so, are there any process/procedural "fixes" you could put in place to curtail them? I've always thought that instead of capping the amount you could win in a lawsuit, you should fix the % that a lawyer can earn off medical claims (tho I think you might create a problem where lawyers will only cherrypick the easiest/most profitable cases) Your thoughts?

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I don't do med mal. But my company certainly makes a number of industrial/household products on which we get sued all the time. I can't of course reveal particular numbers, but I can say that the cost of defending frivolous suits is not a big percentage of our actual COGS -- without looking, it's got to be well under 1%. I suspect the lawsuit defense number is going to be higher in the medical service space, just because the causation is messy and the result of service is death much more often.

The British system seems to cut down on the number of frivolous lawsuits. There, the loser must pay the winner's fees -- and post security in order to proceed with a case to ensure that defendants can recover. Empirically, that system will cut the number of bad lawsuits, but it will also cause some number of meritorious suits to never be filed. I don't know that anyone has tried to do a rigorous study of the impact of that system change on either insurance costs or general efficiency. I also suspect that such a study would be well-nigh impossible.

Caps on punitives and non-economic damages (i.e. pain and suffering, as opposed to actual out of pocket medical costs) seem like reasonable answers. I think many states have contingency-fee caps (my recollection is that California's is 40%, though, so it's not much of a cap) already.

Hope this answers at least part of it.

[egj]

I'm considering hiring a professional malpractice lawyer to recover damages from my CPA. What should I be looking out for in terms of deciding whether to go forward, selecting a lawyer, etc.

I believe my agreement with my CPA states that we must go through arbitration in case of any disagreement. Do you think that I am likely to get a fair shake in arbitration?

Although these questions pertain to my particular situation, maybe they can be answered in a general way that will be relevant to anyone who has ever thought about suing someone like a doctor, lawyer, CPA etc.

[TheWorstPlayer]

Howard, how much of current US legal system is unnecessary? For instance, the complexity of the tax code creates the need for complex tax shelter, etc. If they simplified the tax code, they could avoid a lot of the tax legal system probably without giving up too much (at least in some places). So would you agree that our society would not be much worse off if we simplified our legal system in some ways? If so, what ways would that be and how much of it do you think could be simplified?

[suzzer99]

LOL. I just realized you weren't Howard Beale. I though a lawyer would know how to handle a thieving kid a little better.

[Howard Treesong]

[ QUOTE ]
LOL. I just realized you weren't Howard Beale. I though a lawyer would know how to handle a thieving kid a little better.

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Very nice. Beale is an old RGPer and I certainly know of him from there, but I wasn't aware of the his problems with a thieving kid. I'm surprised he hasn't asked for advice from his local Asian massage parlor.

I think this may be the first time I've ever been confused for Howard Beale.

[Boris]

My opinion: Dickie Scruggs is a massive scumbag. Your thoughts?

Hypothetical: Let's say I get pulled over by the cops and they want me to do the DUI dance. I had two beers but I know I am under the .08 BAC limit. Do I dance or do I demand to be taken down to the station for a blood test?

[Howard Treesong]

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My opinion: Dickie Scruggs is a massive scumbag. Your thoughts?

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Let's just say that I thought his position on the Katrina cases was horrible for our society in the long run. Contracts and the certainty of obligations really do matter. Insurance companies are no shining lights -- and I dislike many of the players in that industry -- but I thought Scruggs' position simply ignored critical limations in insurance contracts and was tantamount to theft. I don't know him personally nor do I know anyone that does. If he's guilty of the conduct charged in the indictment then he is absolutely a scumbag.

[ QUOTE ]
Hypothetical: Let's say I get pulled over by the cops and they want me to do the DUI dance. I had two beers but I know I am under the .08 BAC limit. Do I dance or do I demand to be taken down to the station for a blood test?

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I'm a total layman on this issue. I think my own inclination would be to go for the blood test, on the theory that it's most likely to be accurate (as compared to breathalyzer or the dance). But this precise issue is why I call a car service when I'm drunk.

[Howard Treesong]

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Howard, how much of current US legal system is unnecessary? For instance, the complexity of the tax code creates the need for complex tax shelter, etc. If they simplified the tax code, they could avoid a lot of the tax legal system probably without giving up too much (at least in some places). So would you agree that our society would not be much worse off if we simplified our legal system in some ways? If so, what ways would that be and how much of it do you think could be simplified?

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Being a libertarian nutter, I'm right with you here. The tax code is horrifically complicated; federal acquisition regulations (called "FAR") are perhaps as bad. They're dense, abstract, onerous and ambiguous. I don't know the overall costs for compliance with these and other regulations except to say that the number is massive -- and much of it the senseless result of partisan politics.

One anecdote, however, illustrates the idiocy of government regulation. In its wisdom, the FDA implemented a regulation saying that juice manufacturers could claim "no sugar added" on their products so long as the added sugar wasn't cane sugar. My client promptly started buying grapes and stripping them down to raw sugar and adding that. Voila! From a health perspective, my understanding was that grape juice concentrate is no different than cane sugar, and it was certainly no different from a taste perspective. But the stuff could then be marketed entirely differently. Taste and health profile was the same, but the cost was quite a bit higher.

I got involved because the client needed a southern-hemisphere source of grapes to ensure a year-round supply, and entered into a contract with an Argentinian company. The Argentine guys then promptly defrauded my client out of many millions of dollars and shipped product that was fermented. Litigation and many amusing war stories ensued.

I have no idea how to quantify the problem, however -- and this is just a tiny, tiny example.

[ElliotR]

Let me jump in while Howard is at work:

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I'm considering hiring a professional malpractice lawyer to recover damages from my CPA. What should I be looking out for in terms of deciding whether to go forward, selecting a lawyer, etc.

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Litigation can be very time consuming and expensive. Will you still be glad you're suing a year from now? what accusations are you going to have hurled back at you? Much of the time it is not worth it IMO.

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I believe my agreement with my CPA states that we must go through arbitration in case of any disagreement. Do you think that I am likely to get a fair shake in arbitration?


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It depends on how the arbitrator is choses and what arbitrable body (if any) is specified, but, in general, no.

[Howard Treesong]

[ QUOTE ]
I'm considering hiring a professional malpractice lawyer to recover damages from my CPA. What should I be looking out for in terms of deciding whether to go forward, selecting a lawyer, etc.

I believe my agreement with my CPA states that we must go through arbitration in case of any disagreement. Do you think that I am likely to get a fair shake in arbitration?

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I've had mixed experiences with arbitration but am generally down on it. I tend to take great care in selecting an arbitrator and in your case would want to make sure he's not an industry captive. I thought the quality of arbitration in an NASD (National Association of Securities Dealers) I did was very poor; our ICC (International Chamber of Commerce) arbitrator was excellent.

If I were in your shoes, I'd think very seriously before I initiated a claim. Magnitude is obviously important, but causation equally so. Litigation of any type is rarely as clean-cut as it first appears, is full of heartache, stress, and is only occasionally worthwhile. I know these are general observations, perhaps bordering on platitudes.