Michael Herman
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Fear of the American legal system has created an atmosphere in which lawyers working for European businesses would prefer to face a major dispute in Russia or China than the US, a study has revealed.
A survey of 180 in-house counsel working in five European countries identified the US as the jurisdiction they were keenest to avoid, with 29 per cent naming it the country they were most concerned about facing a major dispute in.
The US attracted almost twice as many votes as Russia and China. Despite fears of political interference and corruption in their legal processes, both were named by just 16 per cent of in-house counsel as their most feared jurisdiction.
The survey, commissioned by Lovells, the international law firm, noted that “while in-house lawyers are relatively comfortable with managing disputes in their own countries, there is great concern regarding the unknowns in different markets”.
It said the US system, although less corrupt than most, is "filled with traps in which the inexperienced or uninformed may easily become caught”.
Marc Gottridge, Lovells’ US managing partner, said these traps include the complexity of the US federal system, with its "multiplicity of courts, prosecutors and regulators at state and federal levels" and the tradition of targeting corporations as well as individuals in criminal cases.
Although the survey found that businesses were most concerned about disputes with customers, suppliers and employers, the fear of clashing with regulators stands out as an emerging area of concern that will "keep lawyers awake at night”.
In particular, Lovells highlighted the aggressiveness of American prosecutors and their willingness to apply US laws overseas as another factor making European lawyers nervous.
Last week Ian Norris, a retired British businessman wanted on price-fixing charges in the US, secured an important victory in his fight against extradition at the House of Lords. But lawyers said American prosecutors were unlikely to be discouraged by this and would continue to pursue other businesses and executives they suspect of breaking its laws.
Joanna Wood, an extradition expert at Allen & Overy, said: “The risk of extradition in appropriate cases is still a real one and US prosecutors are unlikely to be deterred.”
Overall, the survey found European in-house lawyers indicated a trend towards more litigation with 38 per cent saying they had seen increasing numbers of disputes in the last 12 months compared to 14 per cent who reported a fall in numbers.
Despite widespread fears that Europe was moving more towards a more consumer-oriented litigation culture, less than a quarter (22 per cent) of European in-house counsel said they had been threatened with, or actually faced, a class action lawsuit.
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Dear Ryan Lacy. I thought that the issue was that some lawyers fear that the legal system is preventing the growth of business by strangling investment. The job of the law, surely is to serve the people, but then what do I know.
Lawyers eh!
nicholas, Oxford, UK
The United States is a foreign power occupying the several states of America.
Headed for evil worse than Sodom and Gommorah on a bad day.
giles farmer, manitoba,
Wow, so many of the comments on here are bizarre. First, only 2-3 posters picked up on the fact that the headline and the article do not match. The headline should be "European Corporations can more easily avoid government regulators in Russia."
Next do any of those who comlained about summary judgment know the first thing about what summary judgment is and what the standards are? Most [the vast majority] of summary judgment motions are denied. Both because of the high standard that has to be met to receive that remedy and because Judges generally are reticent to take a case out of the hands of a jury. The statistic is just about right as to how few cases reach a jury, but the interpretation of why is totally off. Most cases settle because eventually the sides figure out their respective legal positions and can figure out the most likely outcomes at trial and eventually reach an agreement that saves them both the costs of trial and the danger of a bizarre jury verdict. Sheesh.
Peter B., New York, New York
There can be no doubt that the American Public is outraged with what they believe is their corrupt judiciary. The truth is deliberately concealed, summary judgment supersedes trial, and the evidence and facts are for naught.
Sharon Carter, Puyallup, WA
I live in the U.S. and am an American citizen. The legal profession is like a slow growing cancer on our Democracy. I will give a simple example. Google 7th Amendment to the Constitution and read what U.S. Citizens are supposed to have as far a a right to a jury trial. The Federal Judicial has adopted a procedure called SUMMARY JUDGMENT which allows for a judge to determine there are no triable issues and grant victory to a party in a case. SUMMARY JUDGMENT is arguably unconstitutional http://papers.ssrn.com/sol3/papers.cfm?abstract_id=886363
There are more lawyers in COngress than any other profession and they will not affront judges by looking into citizen allegations of judicial misconduct. I could go on but this is a basic over view of the broken American judiciary that is totally out of control.
Joe Norman, Tallahassee, FL, UNITED STATES
It is alas for the USA a proven fact that many non-US businesses nowadays try to avoid it, due to the legal system. In the long run bizarre cases like the lady who put the cat in the microwave oven to dry, and got away with a big compensation claim on the manufacturer, are overturned in higher appeals courts. Alas she initially was rewarded a huge sum by the jury.
This is entirely due to the fact that American lawyers are allowed to litigate on a 'no cure no pay' base. A practice forbidden in many European countries (lawyers have to do such cases on a per hour rate over here). Frivolous class actions are also way easier to file in the US than in European countries, where individual contracts with firms cannot be bundled that easy.
There is a reason why the number of American lawyers per inhabitant is near 5 times that of a typical European country.
I have had European continental law contracts of two pages, where the same product and service from an American firm required 55!
Karel, Amsterdam, Netherlands
There are some sad statistics which tell the tale of the U.S. Legal System.
Over 98% of all civil and criminal cases filed into the state and federal courts, of the United States, never go to trial (USDOJ Bureau of statistics). The civil cases are either "clerked out," dismissed for "technical-procedural" reasons; die of procedural exhaustion, or some sort of settlement is coerced eliminating a trial.
Few cases are tried fully on their merits. Fewer still are ever heard by a jury.
In America today, the two most dangerous places a person can find themselves is in an American courtroom or an American jail.
Americans have been conned into surrendering their minds, thus, their lives, to "experts" i.e. lawyers, police, doctors, psychiatrists, and accountants who, in fact, have become utterly corrupted and dangerously incompetent.
Sad, but oh so true.
Robert, Vancouver, Washington USA
I am a businessman and want to avoid the US as much as possible. Recently I was offered an opportunity to start a business in the US. My answer was simple: the US is the perfect place to be sued for anything and everything. Also, the hungry US Government will need more food (money) in the future. As the USD will continue to lose value, the government will need to find new sources of wealth to feed upon, and will go on a legal whichhunt to extort more revenues. The Dollar will collapse and I donât want my business to sink with the American Empire.
Daniel Morin, Montreal, Canada
It is a fact that over the years the amount of pages in the Federal register of administrative laws has grown gargantuan.
The tax laws are Byzantine like which exacts a huge of resources for people and companies alike to avoid breaking the law.
In particularly, the legislative and the executive branches of government continues expanding their jurisdictions overlapping state and local laws opening up the potential for liability. If you are a business or an individual you must make it a priority to stay out of the civil and criminal courts at all costs because they will bleed you far more than avoiding them.
All of this contributes to the high cost of insurance for autos, health and real estate. The recent Sarbanes-Oxley law has also driven companies to list overseas or go private in order to avoid the cost of compliance to the law.
America is slowly turning into a legal tyranny run for the lawyers and by the lawyers.
Steve, New Orleans, LA
I would say this article is actually good news about our justice system, as suprising as it may appear to some of you., The Euro lawyers for the Euro corps. have an easy time in communist countries where essentially all of governmernment is in bed with the corporations. The laws over there suit then just fine when running over individual rights are concerned.
Frank , Playa del Rey, CA
Did any of you actually read this story? Or did you just read the headline and decide to jump straight to your comments.
The article, if you take the time to READ it, says the US legal system is feared because:
1. It is less corrupt than the global average.
2. It is complex, requiring foreign attorneys to actually pay attention and not just sail through to a paycheck.
3. US Attorneys are good at their job, and aggressive.
THAT is what the article says. Read the article before you comment, lest you look like a complete fool, which most of you do now.
Ryan, Lacey, WA, USA
If there is a silver lining to this cloud, it is that the growing fear and loathing of the rogue U.S. legal system (truly a Frankenstein monster) will discourage international firms from doing business here, thus creating further economic hardship in the U.S., which in turn prompts some serious self-examination and reform.
That's a codeine-induced dream, of course, but wouldn't it be wonderful if this once-great nation finally started to suffer consequences for its actions (a la Rome, circa CE 410-476)?
Scott, Tucson, Arizona, USA
This hardly came as a surprise. The country that aquitted OJ and almost had the Duke lacrosse players sentenced, and in which Spitzer were allowed to ravage honest business men and women never looked like a shining light of justice to me.
Kjetil, Asker, Norway
If anything this article is understated.
In the US, its well understood that the law is for the wealthy only, and that only the poor go to jail. The cost of legal representation is out of reach for the average citizen.
There are so many ways of ending up in Jail in the USA, child support enforcement, income tax problems, domestic violence, not to mention an extremely large criminal code, that we have the largest prison population in the world.
Foreign citizens, don't realize the nature of the risk they take when traveling here, there's an old joke that says..."arrive on vacation, leave on Probation", that says it all.
G. Anderson, Los Angeles, CA, USA
As an American, I can truly appreciate the hostile climate our "Leaders" have created towards our country throughout the world - we deserve it, in my opinion; we are now reaping what we have sown. KARMA.
However, to those of the UK, I would suggest taking a look in the mirror. I could easily come up with a headline that portrayed the UK in a very bad light in a word, and then got to the real truth in the article. For example, a headline of this nature would be comparable to the one for this article in it's "truthiness": "UK Citizen Privacy 'worse than Russia'".
Finally, there is not one shred of statistical proof to this story - it is based on a survey that provides OPINIONS and PERCEPTIONS, not facts. My guess would be that the facts do not exist to make the case, so they used opinions instead.
Manipulating public perception via surveys to meet preconceived goals of those paying for the survey is nothing new. Read up on Edward Bernays -his propaganda techniques are used here.
JB, Milwaukee, Wisconsin
The U.S. is overtly playing policeman of the world. The war in Iraq is only the most obvious example, but the article outlined a couple more real problems. We are over-taxed and *way* over-regulated. And our government has the gall to reach into other countries to enforce our laws? It seems like our Federal government does not know where our national borders are. This is a real embarassment to me when I visit foreign countries. Most people realize that I cannot be blamed, of course, especially when they find out how firecely I oppose the Bush administration. . There was a time when we could be proud to be an American. We were a beacon of freedom to the world. No more. Please see my political blog where there is an essay on the Religious Right, and where one on economics will be posted in about 2 months, at http://www.alicelillieandher.blogspot.com .
Alice Lillie, Las Vegas, USA
America is like a nosey busy body. It has to try to control all aspects of the global community and if that doesn't work through legal means, the government will send in its stormtroopers to rectify the situation. Law and lawyers mean nothing. America enforces its dictates on the nations of the planet and if one should not like it, well, too bad. The problem resides in the fact the rest of the world dancers to the American piper. The New World Order crowd has decided America will be its military arm and the legal system means nothing in the grander view. Those in the "I got mine" clubs do not give a hoot about the legal system in America. Most lawyers belong to one of those clubs. The legal system in America is used to justify the tyrannical nature of its actions. Ask anyone outside the "I got mine" clubs. The legal system in America is used against the people and anyone with eyes open can see it.
Wayne, Boston, Massachusetts
But don`t forget-america is the "land of the free and home of the brave" and is a "democracy" and doesn`t terrorize or start wars or commit genocide on innocents 7 days a week............
Ferdy, Basel, Switzerland
The headline misrepresented the article. The title claims that the U.S.'s legal system was found to be 'worse than Russia's', even giving the impression this was a direct quote. However, nowhere in the article did anyone claim that the U.S. 's legal system was 'worse than Russia', but merely that it was the jurisdiction in-house counsel were "keenest to avoid", not because of its unfairness so much as its complexity and the aggressiveness of its prosecutors. The U.S. legal system is no doubt more complex and its prosecutors more aggressive than those of Russia. That hardly makes it worse. Nevertheless, judging from the other comments here, it appears that the editors have achieved their apparent goal of delighting their audience through gratuitious U.S. bashing, reminding us once again that selling to, rather than informing, the public is the primary role of the media.
Michael E Piston, Troy, USA
I blame Perry Mason, Petrocelli, LA Law and Matlock to name a few. They made it fashionable (well, not so fashionable in Matlock's case - you could hardly say Andy Griffith was a pin-up...) to be in the courtroom - and millions of Americans do their darndest to live the legal dream!
James, London, UK
I'm American, and I approve of of the two posts above mine.
Steven, California, USA
The US has the best legal system that money can buy - with the stress on the last four words.
Chris, Ashford, Middlesex, UK
this is yet another example of the us long decent into oblivion.
jack, sf, zambia