Where Have all the Trials Gone?

Today’s WSJ ($) has an article reminiscent of Monday’s post on the effect of tort reform on the number of personal injury lawyers.  Large law firms are trying to get their junior associates time in front of judges and juries, but there just aren’t any trials to be had. So law firms are volunteering their associates to do pro bono work for prisoners (who are without counsel.) who have an upcoming trial.  Here is the litany of reasons given for the dearth of trials….

Courtroom trials have been steadily declining since the 1980s. There were only 5,500 federal civil trials across the U.S. last year, down sharply from 14,300 in 1984. State civil jury trials dropped 34% between 1976 and 2003, even as the volume of civil cases disposed of during the period rose 165%. In criminal court, meanwhile, federal sentencing guidelines are so stiff that more than 95% of all criminal defendants opt for plea deals that offer leniency rather than risk going to trial.

There are plenty of reasons behind the falloff. Scared off by huge jury verdicts, such as the $253 million awarded this year to the widow of a man who died after taking Merck & Co.'s Vioxx drug, more civil litigants are arbitrating or settling the majority of disputes, legal experts say.

The cost of litigation, which often drags on for years, has scared off some plaintiffs. Changes in the law have also had a dampening effect on trials: Judges can now more easily dismiss cases that rely on junk science. "It's like you prepare for a big game and then it gets canceled, so you have to negotiate a final score," says James Winton, a partner with Cleveland-based Baker & Hostetler.

Furthermore, lawyers say fewer marginal or low-damage cases are being filed now that some state legislatures have imposed caps on jury verdicts.

Is the litigation bubble coming to an end? See also David Giacalone and Walter Olson discussing the Saintly Chamberlain family’s reluctance to sue Macy’s, New York City, New York State, the balloon handlers, the balloon makers, the manufacturer of the light pole, the manufacturer of the light, the installer of the light pole, the maintainer of the light pole, the balloon tether manufacturer, Mars Incorp. (because it was an m&m (TM) balloon), the National Weather Service for failing to predict the wind, and the State of New Jersey (because it is close to New York).

Comments

[Ted]

The number of trials is unrelated to the size of litigation. The latter is definitely up, even as the former is down.

1. Plaintiffs' lawyers have figured out how to structure litigation in such a way to deter corporate defendants from attempting to vindicate their rights at trial on appeal. Examples: Madison County asbestos, gigantic bet-the-company class actions that can be settled for pennies on the dollar, the recent campaign to force Merck into a global settlement of Vioxx cases. Too, as the price of litigation has increased (both in terms of attorneys' hourly fees and in terms of the document explosion of gigabytes e-mail that ends the day of the "single-box" litigation), it becomes easier to craft "nuisance settlements" that both sides find profitable.

2. There are real principal-agent problems that make corporate defendants, corporate plaintiffs--and, increasingly, corporate defense attorneys--much more willing to settle rather than try cases, though the principal would be better off with a trial, ex ante. The WSJ doesn't address any of these, but it's a mistake to think that this reflects the litigation bubble bursting rather than the increased pressure that litigation can impose on a business.

I'll expand on this much further.

[Martin]

Ted--I had my tongue in my cheek, but your points about the game theoretic and principal/agent aspects of this are on point. This is a good topic for further exposition.

[Carolyn Elefant]

This is really old news - I posted about a decline in trials almost two years ago here - http://myshingle.wynn.com/article.pl?sid=04/08/20/0617253&mode=thread

As for the decline in trials, I do tend to agree on one hand that Ds are far more likely to settle. But also, courts sometimes delay so much that witnesses die, litigants run out of money and even attorneys handling cases go on to other matters. So many cases wind up being dropped by attrition which isn't right either.