Andy Ho: Let David take on Goliath in court: Champerty
Straits Times; 02 Aug 2013; Andy Ho
Singapore should follow the example of the US and allow champerty: letting lawyers take on cases for a cut of the fees. This brings justice within reach of the poor
THE highest court in Singapore recently decided a case of professional misconduct involving lawyer's fees.
In Law Society versus Kurubalan Manickam Rengaraju (2013), the lawyer involved was convicted of champerty. A term that comes from the Latin "campi partitio" for "division of the proceeds", champerty involves a lawyer taking up a case with the contract to get a specified cut from whatever the client may recover in the action. Called the contingent fee arrangement in the United States, it is prohibited in Singapore under the Legal Profession Act.
In the last similar case back in 1976, the solicitor was struck off. In the present case, the lawyer was only suspended for six months. Apart from case specifics, the less harsh punishment also reflects how society's values may have changed to make the offence appear less reprehensible.
Indeed, today's circumstances have changed substantially from 1275 when the Statute of Westminster prohibiting champerty was passed, amid a culture that considered litigation quarrelsome and un-Christian.
It would be 692 years before Britain decriminalised it in the Criminal Law Act of 1967. Even this would come 119 years after New York state had done so in 1848, which was followed by New Jersey in 1878. Today, 28 states in the US allow it.
Mediaeval norms
SINGAPORE should follow suit and allow champerty, for two reasons.
• First, a contingency fees system is consistent with the market ethos of our culture, the very reason the US was the first common law jurisdiction to decriminalise champerty.
• Second, the cultural norms of early mediaeval England that led champerty to be criminalised in the first place are quite irrelevant to us.
In the US, the impetus for change came from rising rates of workplace accidents as the economy industrialised. Those with meritorious claims but who had no money to hire lawyers clamoured loudly for access to justice.
Lawrence Friedman, in A History Of American Law (1973), detailed how an increasing demand for legal representation by the poor against railroads and factories overwhelmed the bias in common law against champerty.
In short order, contingent fees came to be seen as a risk-sharing device: the lawyer risked not earning anything for the work done if he lost the case, while the victim stood to lose only the portion of any potential compensation won that would go to his or her lawyer.
In common law, however, champerty was condemned for fear of the abuses it might promote, that the lawyer may be driven, "for his own personal gain, to inflame the damages, to suppress evidence, or even to suborn witnesses" as Lord Denning put it in Re Trepca Mines Ltd (1963).
But most of all, it would supposedly promote litigation, especially frivolous or non-meritorious suits. In days of yore, litigation was seen as erosive of the social fabric. Champerty, by enabling more suits which otherwise would not have been brought by the indigent, was thus morally reprehensible.
But why was litigation an evil?
In mediaeval England, litigation, even if there was merit in the case, was seen as arising from "a quarrelsome and un-Christian spirit", according to Max Radin's classic article, Maintenance By Champerty, published in California Law Review in 1936.
Litigation was also seen as being driven by speculative greed for profit, which "in mediaeval eyes was... the essence of the abhorred sin of usury".
By the 18th century, the culture was suffused with these attitudes towards litigation. Anything that promoted litigation, like champerty, was not seen as conducive to the commonwealth.
This legacy conveniently paved the way for modern objections to champerty to be "voiced by the more successful members of the profession and on behalf of propertied defendants", Radin noted. Top lawyers had little need to take cases on contingency fees as their rich clients could afford their fees. These clients, in turn, preferred any arrangement that led to fewer rather than more suits against them, naturally.
Anti-champerty attitudes thus flowed from an anti-litigation stance that was, in turn, grounded in some pre-capitalist, religious or cultural assumption.
Those views shouldn't hold much water these days.
Seeking justice without risk
TODAY, most people would agree that a victim of an injustice or injury has a right to seek redress from the injurer.
If the culprit won't do so on his own accord, then bringing a suit against him is right and proper.
But a victim may not have money for upfront legal fees. This is where contingency fees come in: offering victims an avenue to seek justice at minimal financial costs to themselves.
In the United States, litigation was no longer viewed negatively from the 1950s as a result of the civil rights movement, when activists went to court to sue to expand the rights of different groups of minorities to protect themselves from discrimination. Personal injury suits also came to be regarded as a socially useful way to resolve disputes and express one's political rights, according to a 1964 American Bar Association report.
Nor was speculation - investment with a view to getting financial gain - regarded as morally questionable. Transformed from his English roots, the US lawyer - as market participant - could invest as he saw best. This included the market freedom to invest his time, energy and money into a case to reap great rewards if he won on a contingency fee basis but not make anything if he lost.
Contingent fees aligned especially the economic goals of lawyer and client, and were viewed as incentives to encourage more diligent work from lawyers.
The difference in approach between the US and Britain shows that attitudes towards champerty are historically constructed.
Seen from one perspective, champerty empowers a David to act against his Goliath. On the flip side, it may overcompensate the lawyer, in the sense that David could have got more in compensation had he been able to afford upfront legal fees instead. The US industry standard for contingency fees is one-third of winnings. But then again, if the case failed, David would have lost nothing and got his day in court.
Champerty can bring justice within the reach of those who can't afford a lawyer otherwise. It should be allowed and not denied just because of some cultural baggage from mediaeval England.
The apex court noted that, "properly regulated" to rein in any evil consequences, champerty would help the "impecunious" client. But it added that it was up to Parliament to decriminalise it, if appropriate.
With workplace injuries and diseases costing the economy $2.62 billion in 2011, according to a Workplace Safety and Health Institute study just out, it arguably is.
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