The "reform" movement’s silence speaks volumes about their true motives
Read enough "reform" literature, and you'll see the same themes, repeated over and over again. They include:
- The contingency fee system encourages plaintiffs' attorneys to file frivolous lawsuits
- The court system is clogged with thousands upon thousands of questionable lawsuits, thus depriving legitimate litigants of their day in court
- Rent-seeking attorneys actively seek out lawsuits, sometimes even manufacturing cases by paying plaintiffs
- Plaintiffs with small injuries sue for big money
The following article illustrates every one of these litigation sins, yet the "reform" movement isn't complaining:
Cook County Circuit Court has been turned into a frenetic debt collections machine, a reflection of easy credit gone sour and a collections industry determined to get paid.
More than 119,000 civil lawsuits against alleged debtors are clogging courtrooms, and at least half will result in judgments that debt collectors will use to dock wages, seize bank accounts and file liens against homes, compounding the woes of troubled borrowers. (Emphasis added.)
But because debt collectors operate on volume—pushing through lawsuits based on little more than lists of names, addresses and alleged amounts due—there are also plenty of instances of mistaken identities, cases where debts are alleged when the bills have been paid and even situations where people have fallen behind and tried to work out repayments only to be hauled in to court.
"The system is out of control," said Michelle Weinberg, a supervisory attorney at the Legal Assistance Foundation of Metropolitan Chicago. "It's one thing to call a debtor on the phone. It's another thing to file a lawsuit in court." (Emphasis added.)
A new breed of collector has transformed the industry in the last decade, purchasing distressed debt from credit card issuers, retailers and other consumer lenders. Debt buyers usually only pay pennies on the dollar for packages of unpaid bills that include limited electronic information about the borrowers. [This isn't much different than what Milberg Weiss did, when you think about it. That firm paid plaintiffs so it could bring suits on their behalf. Debt collectors are paying creditors for the right to bring suits, too. - JCL]
Since 2000, the number of debt-collection cases in Cook County has more than doubled, to an estimated 130,000. The vast majority of suits are against Chicago residents. In 2007, debt collectors obtained 60,699 default judgments where the accused debtor did not appear in court.
Consumer groups say the high number of default judgments can mask flaws with the lawsuits. Credit agreements and payment histories are often not included when suits are filed. Instead, debt collectors file an affidavit attesting to the validity of the debt, and it's not unusual for that affidavit to be erroneous, said Bob Hobbs, deputy director of the National Consumer Law Center. (Emphasis added.)
Andersen acknowledged that there is ambiguity about the minimum evidence needed to verify a debt. In New York, an Urban Justice Center study in 2006 found that in 99 percent of a sampling of default judgments that the evidence used to obtain the judgment did not meet the state's legal standards. (Emphasis added.)
(Hat tip to Consumer Law & Justice Blog)
Look at that last highlighted portion: The vast majority of debt collection suits end up with a default judgment. And 99% of those default judgments are based upon legally insufficient evidence. That means that the majority of debt collection suits aren't supported by legally sufficient evidence - they're truly frivolous lawsuits. In Chicago alone, debt collection agencies have filed over 100,000 frivolous lawsuits, yet the "reform" movement isn't working to put a stop to their practices. Why not?
Because for all their talk about restoring fairness & predictability to the justice system, many "reformers" actually have one simple goal: To make it harder for individuals to sue corporations. In their eyes, the only good plaintiff is a corporate plaintiff, and the only defendant unworthy of protection from suit is an individual defendant. To many "reformers," this is how the court system should function: As a tool for businesses to use against each other and against individuals. Fairness has nothing to do with it.
One hundred and nineteen thousand lawsuits, in just one city. And the "reformers" declared a crisis when only 20,000 silica lawsuits were filed in the entire state of Mississippi. Now, I know someone out there is chomping at the bit to challenge the legitimacy of those silica lawsuits, perhaps ready to point out that much of the medical evidence in those suits may have been fabricated. But in these debt collection suits, the only evidence is often a self-serving affidavit prepared by the plaintiff. An appropriate analogy would be if an individual filed a silica lawsuit and the only evidence submitted was an affidavit that they personally wrote. It's an affront to the justice system to call such an affidavit "evidence." Imagine the outrage if thousands of consumers sued a manufacturer based upon nothing more than an affidavit that said, "I bought Acme's product, and it injured me."
If groups like the Chamber of Commerce truly cared about protecting the civil justice system, they'd be spending some of their millions of dollars to rein in these abusive debt collectors who clog the courts with these truly frivolous lawsuits. But the fact is groups like the Chamber are funded by debt collectors, and the Chamber isn't going to bite the hand that feeds it.