The Litigation Crisis: Competitiveness and Other Measures of Quality of Life

Abstract

It is alleged that there are too many lawyers, that there is too much litigation, and that legal costs are too high. America, it is alleged, has seventy percent of the world's lawyers. In a recent ten-year period, it is alleged, product liability suits increased eight hundred and fifty percent. The legal system, it is alleged, costs $300 billion a year. Assuming these numbers are true, this article asks, So What? Is this too much or too little? Relating overlawyering to global competitiveness suggests that laws, lawyers, and lawsuits interfere with America's ability to compete with other countries. The goals of minimizing conflict, internalizing costs, compensating victims, and creating incentives for accident cost-minimization all figure into the optimal level of lawyering and the optimal legal doctrine. When thinking about how much litigation is "too much," one could think in terms of the broader goals of a legal system and a set of legal doctrines. This article argues that if lawyers and the law serve goals other than economic growth, perhaps the optimal number of lawyers is greater than that necessary simply to promote economic growth.

Keywords: litigation crisis, economic efficiency, global competitiveness