In Love With Lawsuits


AS OLIVER WENDELL HOLMES OBSERVED A CEN- tury back, every so-called legal decision is at bottom an expression of public policy: “When a child of 6 [he wrote his friend Lady Clare Castletown, in 1897] puts her hand into a coffee-grinder in a shop and gets her finger taken off and we say she can’t recover because she was hurt in consequence of unlawful intermeddling, we are saying in effect that it is more desirable that property should be respected and protected even from a harmless touch than that one too young to look out for herself should have her finger kept on—not necessarily an absurd proposition but one which wouldn’t be so popular if stated that way!”

Although Holmes and like-minded thinkers did not articulate the idea publicly, the law had concluded that manufacturers met their social obligations by the mere act of providing needed products. Any injuries resulting from the manufacture or use of the products ought to be considered simply a cost of progress, to be borne by society. At any rate, burdening the manufacturers would simply deflect economic energy and discourage further investment in socially useful industries.

Gradually a different concept began to emerge. Spurred by the investigative journalists known collectively as the muckrakers, by the prophets of the movement to conserve natural resources, and even by novels like Upton Sinclair’s The Jungle and Frank Norris’s The Octopus , the country’s social conscience enlarged perceptibly, at least to the point of recognizing that it was not society generally but usually helpless individuals who in fact paid “the cost of progress.”

Actions of tort—that is, lawsuits for money damages— had always been available. But the courts, through an arsenal of legal principles, had made the remedy easier to seek than to obtain. If, for example, the plaintiff had failed to exercise reasonable care for his own safety, he could not recover at all, even though his negligence had been slight and the defendant’s great. In addition, if the plaintiff was an employee suing his employer, and the person whose negligence caused the injury was a fellow employee, that negligence did not infect the employer. Finally, if the injury resulted from the nature of the task, the law regarded the worker as having assumed the risk. This constellation of common-law rules produced a cruel paradox: An employer owed a lesser duty to his own workers than to an outsider injured by the operation of the business.

BY THE middle 1800s, the enshrinement of the contingent fee was complete—making litigation a contest that anyone with an injury could enter.

AS THE NINETEENTH CENTURY ENDED, REVULSION against the system’s unfairness provoked the state-by-state adoption of a legislative remedy, the workmen’s compensation acts. Their principle, simply stated, was that someone injured at work was entitled to payment for his medical expenses and lost wages. Only the fact of workplace injury mattered, not who caused it, or how it happened, or even the injured worker’s own negligence.

Like most good things, workmen’s compensation had drawbacks. Although payment was certain and generally easy to obtain (the biggest problems, usually, were proving that the worker’s disability had in fact resulted from an on-the-job incident and the extent of the disability), it covered only a portion of the wage loss. More significant, workmen’s compensation paid nothing for intangible pain and suffering.

The law had always distinguished between injury intentionally inflicted (for example, a punch in the nose) and injury caused by negligence (as when a careless wagon driver ran over a pedestrian). In Holmes’s memorable phrase, “even a dog distinguishes between being stumbled over and being kicked.” It was not, however, until the 1840s and the proliferation of steam-powered machinery that the courts began facing substantial numbers of claims for personal injuries arising out of negligence: railroad accidents, industrial mishaps, falls in stores, and a torrent of similar misfortunes.

Industrialization and the growth of mechanized transportation multiplied the numbers of people likely to suffer serious injury. These injuries, moreover, resulted from the activities of enterprises not only fiscally plump but endowed with substantial additional financial resources by the proliferating insurance companies. In these “personal injury” suits, plaintiffs, if successful, could recover not only their medical expenses and lost pay (so-called special damages) but also whatever the juries might award as monetary balm for the mental anguish the injuries had inflicted.


Almost always the injured person had retained a lawyer to represent him, not by paying a fee in advance or even by promising to pay the attorney for however much time he spent. Instead the lawyer agreed to take payment only out of such proceeds as the lawsuit might generate. The fee, in short, was entirely contingent on the lawyer’s obtaining a favorable result—money damages from the railroad, the manufacturer, or the store owner.