A Fall and a Lesson

Wednesday, April 9, 2008

AT ONE TIME, William S. Lerach, Melvyn I. Weiss and Richard F. Scruggs would have been described as three of the nation's most feared and successful trial lawyers. Today, all three can simply be called crooks.

Mr. Weiss pleaded guilty last week to paying kickbacks to plaintiffs he recruited to file class action lawsuits against companies. He must pay a $10 million fine and faces up to 33 months in prison. His former law partner, Mr. Lerach, pleaded guilty to similar charges last fall; he was fined $8 million and was sentenced to one year behind bars. Mr. Scruggs, who came to national prominence in the 1990s as one of the lead lawyers in the massive litigation against tobacco companies, last month pleaded guilty to conspiring to bribe a Mississippi judge. Mr. Scruggs could be imprisoned for up to five years and be fined $250,000.

Many business figures and others who did battle with the trio are understandably celebrating the developments. These three, after all, came to be seen as the epitome of all that is wrong with a legal system that business believes is driven by lawyers who concoct legal claims to blackmail corporations into huge settlements. They were, in short, seen as opportunistic leeches, offering little or no benefits to clients and pursuing litigation only to line their own pockets. And each did become wealthy, earning tens, if not hundreds, of millions of dollars over his legal career. Apparently the risk of prison time wasn't enough to keep Mr. Weiss, Mr. Lerach and Mr. Scruggs from stooping to criminality in their quest for more riches.

Businesses are pointing to the terrible trio as proof positive that, for example, class actions should be abolished, punitive damages capped and losing parties compelled to pay the legal fees of their opponents. These changes would undeniably tilt the scales in favor of corporate interests, which may be exactly what business wants. But such a possible imbalance is not necessarily what would be best.

The truth is that there have always been and will always be voracious and ethically challenged lawyers, just as there have always been and will always be voracious and ethically challenged people in business. Both sets of scoundrels deserve to be punished. What is needed now is a sober discussion about how best to achieve a fairer, more balanced legal system through comprehensive tort reform. Such a system would not be lopsided but would shield businesses from legal blackmail, just as it would protect the rights of legitimate plaintiffs to win just compensation from negligent businesses that caused them real harm. Smart and ethical businesspeople and lawyers -- and, yes, there are many who fit the bill -- would be wise to start working together to craft such a fix.

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