fagin@ucbvax.ARPA (Barry Steven Fagin) (06/13/85)
The following article was written by Martin Tolchin of the New York Times, and appeared in the Oakland Tribune on May 21st. PRIVATE LEGAL SYSTEMS FAST, CONFIDENTIAL PHILADELPHIA -- A student who was raped on a college campus sought compensatory damages from the college and the company that ran its security system. Lawyers produced witnesses who took their oaths. A robed judge, sitting at a bench in front of a large American flag, decided the case on the basis of Pennsylvania law. But the case was not heard in the Pennsylvania Court of Common Pleas, with its backlog of 76,000 civil cases. The parties took the case to Judicate, "the National Private Court System." Judicate's judge heard the case eight weeks later and handed down a verdict the same day. Judicate is one of several concerns created in recent years to offer alternatives to often costly and overcrowded legal systems. Nationlly, the average delay in bringing civil cases to trial is 42 months. Since it was founded last year, Judicate has heard 174 cases, in which the parties agreed that the decision would be binding. The corporation, based here, is publicly held. Similar companies include EnDispute, based in Washington, and the Center for Public Resources, based in New York City. They operate much like "The People's Court," a television program in which small-claims disputes are decided in a private judicial setting. The new companies, however, usually hear cases involving larger sums. Judicate has handled a case involving dividing $300,000 among six people hurt in an automobile accident. Judicate and the similar companies are not licensed or regulated in any state. Civil cases are heard by former judges, among them Marvin P. Frankel, who is retired from the U.S. Court of Appeals for the Second Circuit. Parties can appeal to a three-judge panel. Evidence in the case of the rape victim was presented in three sessions. The judge awarded damages that a Judicate official called "substantial." Unlike arbitrators, who hear cases under ground rules established by the oarties, Judicate follows state laws and procedures, but the public is excluded from its deliberations. "We are basically no different than the public courts in our process, except we are faster, cheaper, and confidential," said Alan Epstein, president of Judicate. All parties sign an agreement that they will be bound by Judicate's decision. Ira Glasser, executive director of the American Civil Liberties Union, expressed concern over such private courts. "These systems shortcut procedural guarantees that make up our concept of fairness," Glasser said. "These courts are thriving because people don't have access to the congested public courts." The right to public trial is central to the American concept of justice, Glasser said, adding: "Privacy seems to offer a short-term advantage in protecting people from having their troubles exposed. Shielding the system can institutionalize a lack of fairness, which is exactly what happened in the juvenile justice system." Among Judicate's clients are unions and casinos in Atlantic City, N.J. If an employee sues and waits four or five years to get into court, he can win reinstatement with four or five years' back pay," Epstein said. "If the case is heard in eight weeks, he gets only eight weeks' back pay, and is reinstated while his knowledge of the company is current" he said. A plumber who had hurt his hand when he put it through the glass of a church's swinging door took his case to Judicate, which then won from the insurance company an agreement to abide by its decision. Jack Brian, a former judge in Philadelphia's Court of Common Pleas, found for the church. The case was decided in a single session, for which Judicate charges $600. The parties chare the cost. The plumber filed an appeal, however, and the appellate panel affirmed Brian's decision. The appeal cost the plumber an additional $1,800. Insurance companies use private procedures for a variety of reasons. Stephen B. Middlebrook, vice president and general counsel of the Aetna Life and Casualty Co. of Hartford, Conn., said it was not unusual to spend more on litigation than on damages. He said Aetna, which has used EnDisupte, the Washington company, often turns to private systems to avoid the adversarial atmosphere of courtrooms, especially when a dispute involves another company "that we would like to maintain a continuing relationship with." It also uses such an approach when it seeks privacy, when matters are technical in nature and in cases involving employees. But Middlebrook estimates that only 5 percent of its cases are privately resolved. Unlike Judicate, EnDispute does not invoke the panoply of the legal system. "Our job is not to tell you who's right and who's wrong, but to provide neutral experts to design and implement alternatives to litigation," said Jonathan Marks, the company's president. EnDispute conducted a hearing on a lawsuit between the American Can Co. and the Wisconsin Electric Co. American Can had sued for $41 million, and Wisconsin Electric countersued for $20 million. They decided to settle out of court after doubts were raised over who would win if the case went to trial. Gee, and I thought private courts were another radical unworkable libertarian idea. --Barry -- Barry Fagin @ University of California, Berkeley