A Free-Market Solution for Turkey's Construction Crime Problem
The talk of tort law and Turkey's earthquake problem reminded me of this article I read a while ago in The New York Times:
Richard W. Fields says he has come up with a win-win financial strategy for the downturn. He is investing in lawsuits.
“It’s always a good time to invest in litigation,” Mr. Fields said, though he added that the weak economy helped.
Not in trip-and-fall cases, mind you, but in disputes that are far larger, more costly and potentially more lucrative, often pitting major corporations against each other.
Mr. Fields is chief executive of Juridica Capital Management. which runs a fund that invests in one side of a lawsuit in exchange for a share of any winnings.
When I read that, it gave me an idea:
The average Turkish citizen wants nothing to do with the court system, believing it intimidating, incomprehensible, rigged, and vastly too expensive and time-consuming to use -- which it is. I speak from personal experience of taking a construction company to court.
The biggest problem is that it simply costs too much to sue someone. The cost of opening a lawsuit represents a substantial portion of an average Turk's annual income.
This article suggests a free-market solution to that problem. I wonder if it might be possible to start a profit-making company that invests in lawsuits?
Basically, since the idea of a lawsuit taken on a contingency basis doesn't exist here, it would be a way of filling that gap.
The idea has an obvious huge advantage over starting a legal aid society: There would be no need to appeal to anyone's good will. Profit would be the incentive, and you can always count on that as a strong incentive.
When I mentioned this to Judith, she said something to the effect of, "Hey, why put your money on only one side of the suit? Turn this idea into a lawsuit version of merger arbitrage and you’re really onto something." (Sorry, Judith, I don't remember exactly what you said -- but it was something like that.) That's a good idea too, isn't it?
What do you think -- feasible? Could it work?
And hey, Duane: Still think I'm a crypto-Commie?
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Comments :
May '10
Re: A Free-Market Solution for Turkey's Construction Crime Problem
This solution could have merit in a society with a clean, IE not corrupt legal system. I am not sure that Turkey would be the ideal environment for this experiment. However I bow to your local expertise.
May '10
Re: A Free-Market Solution for Turkey's Construction Crime Problem
Alas, I can only comment from the perspective of cheerleader. I am all for any free market solution to a societal need. Therefore, I think the concept is wonderful. I do not know enough about Turkey or the practice of law to be able to determine whether this is a feasible idea.
Re: A Free-Market Solution for Turkey's Construction Crime Problem
It's not the cleanest legal system, but it's not non-existent. The idea would work (economically) if it were possible to predict which suits could be won to a better-than-random level of accuracy. And I suspect it is.
May '10
Re: A Free-Market Solution for Turkey's Construction Crime Problem
My experience in the developing world is that power and political connections lead to an even more disproportionate (sp?) advantage in the courts than in the first world. As they are the ones with big money and the odds are stacked in their favor, that leaves table scraps for your proposed group of legal eagles. Over to your assessment as to whether those scraps are enough to present an interesting/attractive business proposition. Both Istanbul and Turkey are large enough to potentially be viable.
Re: A Free-Market Solution for Turkey's Construction Crime Problem
A big potential problem is that you'd need to do it with Turkish attorneys, who are the only ones who would have the expertise to navigate the court system. And Turks are powerfully resistant to new business ideas. If it's not a business your dad knows a lot about, it's not something you do. This would be, clearly, a new idea. I don't know if I could talk anyone into taking a risk on it.
May '10
Re: A Free-Market Solution for Turkey's Construction Crime Problem
Will financial support on either side actually encourage the COURTS to do anything?
May '10
Re: A Free-Market Solution for Turkey's Construction Crime Problem
"Crypto-Commie"? I am mystified by that reference. Where did I suggest such a thing? No, you are a PETA-ad-worthy animal rights nut, in no way whatever a collectivist ;-))
I don't like anything that enables or promotes any kinds of lawsuits- and all big ticket suits require the worst legal remedies invented since the beginning of time as motivations- consequential damages and punitive damages.
To quote the immortal Richard Epstein regarding contracts, the first thing any two parties do in negotiating a contract is get rid of consequential damages. That is indeed the first thing I look for in every agreement I examine.
But why not privatize this further to get past the government corruption. Make every contract dispute subject to ICC arbitration on the documentary record, then raise up a militia made up of APK-purged secular former army officers to enforce the judgments.
Re: A Free-Market Solution for Turkey's Construction Crime Problem
I am so sorry, Duane! I got confused. It was Trace Urdan who intimated that I was a crypto-commie. Actually, I'm anti-PETA, for what it's worth; they have a terrible record of killing healthy animals in their care.
May '10
Re: A Free-Market Solution for Turkey's Construction Crime Problem
Well, there goes the PETA ad idea. We are stuck with (gulp) Pamela Anderson. For what it's worth, we have beef in the freezer raised by my brother-in-law's nephew on a happy pasture, not abused in factory farms.
If it helps, when I left for work this morning, my visiting (vegetarian) younger daughter was sitting in the recliner, half-way through Loose Lips.