Contingency Principles

I have been thinking about some standard Republican positions on "tort reform" and campaign finance reform. On campaign finance reform, the conservatives say there should be no restrictions on campaign contributions because that would amount to a restriction on the freedom of speech. Fair enough.

Now consider "tort reform." A person is injured and alleges that the injury was caused by some intentional or negligent act or omission by another and the law should provide a remedy. These Republicans, who are inclined to view freedom of contract as a fundamental right, propose to limit the freedom of contract of these injured persons and their lawyers. They want to restrict or ban contingency fees which allow the injured party to hire a lawyer for free and pay the lawyer only if the lawyer obtains a damage award in court or by settlement.

How do they rationalize this seeming contradiction? They argue that freedom of contract does not apply because the interests of third parties — the proposed defendants — are "affected" because they are "coerced into litigation." It may be that real quarrel is with the individual’s due process right to sue for redress. With or without a lawyer, the injured person can sue. Yes, but these contracts make it more likely that the defendants will be successfully sued.

But it really all comes back to the merits of the case. The merits of the case are determined by the state of the law, common or statutory, how judges apply the law, and how citizen-jurors determine the facts. Why then the focus on a private contract that cannot directly impact on the merits of the case?

What if I am wrong, however? What if contingency fees really are evil and they really do, in and of themselves, violate the rights of defendants, and the law can therefore restrict them? Fine, let’s ban them, freedom of contract and the right to due process be damned.

Now, let’s shift back to campaign finance reform. Archer Daniels Midland spends millions each year to maintain the sugar quota that robs millions of dollars from Americans by preventing them from buying low-priced foreign sugar. Republicans say, this firm should be able to spend millions to advocate for the continuation of this larcenous law. Are not the interests of third parties involved? Isn’t this firm using the coercion of the state to steal money from people — people who caused no personal injury to Messrs. Archer, Daniels, and Midland — and therefore, don’t we have the right to restrict their right to freedom of speech?

On tort reform, the Republicans say we can restrict a fundamental constitutional right — freedom of contract (see, U. S. Constitution, Art. I, Sect. 10; and the 5th, 9th, 10th, and 14th Amendments)—when that freedom is used to encourage the state to take property from another by force. Yet, they have no problem with businesses exercising their constitutional right to free speech by spending millions of dollars to encourage the state to use force to violate the property rights of third parties.

How do we resolve this contradiction between the standard Republican policy positions on "tort reform" and campaign finance reform? Dare I say that these contradictory positions can be explained? The thread that seems to tie them together is that they both promote the agenda of big business. It just so happens that many of the advocates for these policy positions get their funding from Big Business. "Whose bread I eat, his song I must sing."

When people who purport to support free market capitalism actually turn out to be mere flacks for Big Business interests, they do great damage to our cause by reinforcing the worst leftist caricatures of capitalism. Personally, I could not care less what Big Business wants. I prefer to promote the agenda of individual rights and liberty, the free market and small "r", republican government.

April 3, 2001

James Ostrowski is an attorney practicing at 984 Ellicott Square, Buffalo, New York 14203; (716) 854-1440; FAX 853-1303. See his website at