Underfunding Courts And Underpaying Judges Weakens The Judicial Branch: A Problem That Deserves Attention At The Highest Corporate Levels

Tuesday, April 1, 2008 - 01:00

The Editor interviews Jeffrey W. Jackson , Vice President - Corporate General Counsel, State Farm Mutual Automobile Insurance Company.

Editor: To what would you attribute the soaring cost of litigation?

Jackson: There seems to be increasing evidence that the increased cost of litigation is attributable to unbridled discovery, delay and in some sense, I guess, increased complexity of some of the cases themselves. We are also seeing a greater number of cases, class actions other types of complex litigation, that are just a lot more expensive to handle than are fender bender or slip-and-fall lawsuits. More judges are needed to address the issues in a timely fashion,

Editor: Do you feel that an element in the soaring cost of litigation is underfunding of court systems?

Jackson: There are so many variables that it is difficult to determine cause and effect, so it is risky to generalize. However, it is likely the crowded dockets many courts are facing today are the result of having too few judges because court systems just don't have enough money to pay for more. Significant issues arise when a judge has such a high volume of cases that she can't give adequate attention to managing cases in a way that provides more predictability in a jury trial, and this can drive up the cost of settlement.

Editor: Are judges at a state court level provided with sufficient staff support?

Jackson: Our experience, of course, is based on litigation across the expanse of all of the states in the union. Obviously, conditions vary from court to court and state to state and county to county. I don't think it is any secret that, at least at the trial level, judges in state courts tend not to have as much staff support as judges in the federal judiciary. By that I mean clerks and others who can do more than just routine administrative things. Lack of such support can result in increased expense because it makes it more difficult for judges to move cases forward or to address case issues in a timely manner.

Editor: Do crowded dockets affect a court's ability to address motions in a timely fashion?

Jackson: I don't want to specifically identify the jurisdictions, but we are very sensitive to the fact that some courts, both federal and state, have a backlog of cases on their dockets and consequently, we have motions pending for summary judgment, disqualifications, and other things which if ruled upon would set a tone for the rest of the case. Action on these could move the case along to a quicker resolution, but if no action is taken, the cases just sit while the parties are left to their own devices; typically that means more discovery, more cost, and more attorney expense. Here too additional judges would help.

Editor: To what extent do crowded dockets limit the time that judges can spend on examining the qualifications of expert witnesses?

Jackson: I hate to generalize, but there are instances where you have some judges that assume a case will probably settle and just don't feel it is a worthwhile expenditure of their limited time to address complex issues like the qualifications of expert witnesses. However, having additional judges might help judges find time to address such issues.

Editor: Do you see a similar scenario with respect to e-discovery?

Jackson: I am very concerned about it. Many states are not operating under a counterpart of the new federal rules, so many of them have not provided clear guidelines to their trial judges. Many of the judges expect the parties, particularly their experienced trial lawyers, to work out their discovery differences without expending court time. I don't know whether that is a result only of clogged dockets or whether many judges just don't want to get involved in a discovery dispute. In the electronic world, the concern one should have is that the judge may not have the time necessary to determine the true issues in the case and how e-discovery may or may not affect those issues. As a result, it is entirely possible you are going to see orders on electronic discovery that are going to be very costly and unproductive. Here again, adding judges to relieve crowded dockets would undoubtedly improve the situation.

Editor: Are you seeing more reversible errors because judges don't have the time to be careful in observing the rules?

Jackson: That is a very difficult question to answer. Obviously, a definitive answer requires research, which we have not done. In the case of discovery or the issue of experts we've discussed, to determine whether there is error would involve interlocutory appeals; parties tend to avoid these because they are usually not likely to be granted or necessarily lead to a good outcome. It is awfully difficult for us to reach any conclusion here, because we are usually advised by the courts that they have considered all of the papers and the testimony that is in play. Here again, adding judges might give courts the ability to take more time to consider their rulings.

Editor: Is there a related question with respect to the ability of the appellate courts to handle appeals? Are their dockets similarly clogged?

Jackson: We know that there are certain courts across the U.S. where we have had an appeal pending for three or four years - and we have no word on when we are likely to hear from those courts. I would suggest that that may be evidence that there is a backlog issue. The answer may be that additional appellate judges are needed.

Editor: It has been said that the number of judges drawn from the private sector is decreasing.

Jackson: Our litigation cuts across such a broad spectrum it would be difficult for me to generalize on that. But, it would not surprise me if in fact the demographic shift you referenced is occurring. The answer to attracting more private sector lawyers is to pay judges enough to reduce the immense financial sacrifice that becoming a judge involves for those in private practice.

Editor: Are you seeing that more experienced judges are tending to leave because of insufficient compensation?

Jackson: Anecdotally, we are aware of judges who are leaving because of financial opportunities to go into other areas. Again, it is very difficult for me to confirm the magnitude of the problem. However, there is no doubt that judges are underpaid and deserve to be paid more. Increasing judicial compensation is not only the right thing to do, but would undoubtedly help ameliorate some of the problems we've been discussing.

Editor: How do you feel about merit selection of judges?

Jackson: If that question is asked in a vacuum you could make the argument that you could get a stronger, more qualified, judiciary through merit selection. In the real world, it seems to me that the most important issue is the current underpayment of our judges for the important role they play in our justice system. Whether you use merit selection or an elective system, at the end of the day you would still worry about attracting and retaining quality judges. The most immediate and practical way, in my opinion, to address the merit issue is to increase judicial compensation.

Editor: Underfunding of the state courts is only one element in the DRI concerns about judicial independence. Another is concern is about attacks on judges in the media.

Jackson: When judges make a decision, they may draw questions and criticism from participants who felt disadvantaged by it. I would hope that the participants in a case, the lawyers and their clients, would support the system and not try to destroy it. But, it is important to have judges who have the respect of the parties so that when a decision is handed down, the participants understand the basis for the decision and appreciate the judge's efforts to achieve a fair result. This is yet another reason to offer compensation to judges that is sufficient to attract quality people with the capacity to minimize such attacks and who are sufficiently tough to withstand the inevitable attacks.

Editor: Do you feel that the cost of litigation is too high and finding ways of reducing that cost deserve the attention of the CEO? How important is it for the CEO to have a handle on the total cost of litigation?

Jackson: The costs involved are very high and deserve the attention of the CEO. In calculating the cost of litigation we look at all costs. We look at our outside counsel costs and the cost of judgments and settlements. We look at our expenses that pertain to each piece of litigation, and include ancillary expenses like filing and court reporting fees as well as the cost of experts and consultants. We also look at our inside costs as well, because it takes a dedicated group of professionals here to manage litigation. We also conduct lessons learned inquiries seeking to minimize future litigation.

Editor: One of the points that had been made in one of the interviews is that judges don't have a lobby to fight for adequate court budgets and judicial salaries. Should business come to their assistance?

Jackson: Absolutely. State Farm has long been a strong supporter of the National Center for State Courts. It would be most constructive if a business used its government relations functions to rally behind our judiciary to enable them to have a voice during these trying economic times when the amounts allocated to the courts are in jeopardy of being reduced. At the end of the day a vibrant judiciary benefits all consumers of legal services whether they are companies or individual consumers.

Editor: DRI is leading the charge on this and it has immense influence. Do you have any encouraging words for them?

Jackson: I would just say keep up the effort. We need many other influential groups aware of and concerned about this issue so that we can make some longer term progress.

Editor: Is there anything that you would like to add?

Jackson: Our government is based on the principle of having three strong branches. The judicial branch could be viewed as weakening due to inadequate retention of quality judges. Businesses look at the legal climate in a state in deciding whether to do business there. If the legal and regulatory environments are not stable, businesses will likely consider steps to minimize the disruption those states can produce.