BULLETINS FROM ALOHA

This is the third in a series of articles that intends to provide a road map to improve our legal system.  Our legal system is stuck in the mud.  It is antiquated, it is inefficient, it is expensive.  It is corrupt.  There is no leadership trying to fix the system.  To the contrary, the rich and the powerful are deeply wed to the present system intellectually and financially.  The first Theory for Improvement is on Page 2 below, dated 1/2/08, and proposes the elimination of Probate court.  It outlines why this court is useless and is costing middle class America.  The second Theory is on Page 3 below, dated 2/13/08, and discusses how our legal system has it exactly backwards in how disputes should be settled.  Now, here we offer a third Theory for Legal Improvement which proposes the elimination of Legalese from the earth.

 We work so we can have free time, a vacation even.  Consider the simple transactions in going on vacation.  What happens if the airlines loses your luggage?  Are your rights to recovery and recompense known to you?  To what limits?  It gets worse when you present yourself at the rental car counter.  The Mustang convertible will allow wind to blow through your hair.  To read and understand the fine print on the back of your rental agreement will cause you to tear your hair out.  Never mind the upselling (do not buy the additional insurance--that is a separate profit center for the rental car companies.  Your insurance policy on the car back home should provide all the insurance you need). 

Insurance companies were required to put their policies in an EZ read format for their customers in the 1970's.  They have backslid some, but that is the sort of reform that is within our grasp if we  will only tell our legislators and businesses what we want.  Don't wait for a controversy or dispute with the rental car company or airlines to register your indignation at the state of LEGALESE in our lives and in their contracts.  Recommendation:  Register your protest now by sending a polite letter to each; your local legislator and the first business entity in which you encounter a contract with legalese that you cannot understand.  Anyone with a credit card in their pocket or bag is engaged in a commercial transaction in which the ordinary citizen has no idea what the written rules require from you or allow the financial institution to do to you.    No one!

There are only two times when citizens normally need a lawyer and don't get one.  First, people need a lawyer when they do their wills.  Usually a simple will will suffice, but with the proliferation of second marriages, people need a lawyer's help when planning for the next chapter of life.  Second, people need a lawyer when buying a home.  This is usually the most important time in your life and is the biggest purchase one will ever make (except for purchasing that Hummer!!), so you need a lawyer.  Here is where the wheels have fallen off.  Twenty years ago, the Earnest Money (real estate purchase) Agreement was one page long.  Now it is over eight pages with the most spectacular array of additional do's and don'ts written with indecipherable language.  Caveat emptor!  There is much Latin that remains in LEGALESE.  Caveat emptor means "Buyer Beware".  You are buying a pig in a poke (you are buying something in a bag that you are not allowed to see until you have forked over your money).  Here is why you are buying a pig in a poke. 

There are three components to a real estate sale:  The Earnest Money Agreement, the Preliminary Title Report and the Closing documents.  These three paper packages cannot be understood by Philadelphia lawyers much less the average home buyer.  Consider this  --  a 'trust deed', used in virtually all land transactions, is not a deed at all!!  It is a security agreement not a deed.  These legal documents could easily be put in short form and put in understandable language, but there is no motivation to do so.  Why?  Because the real estate industry lawyers have designed the first package of documents, the Earnest Money Agreement  (EMA), to protect real estate agents.  This has resulted in that ridiculously complex real estate purchase contract, the EMA,  with LEGALESE of no practical use to buyers.  Then the lawyers for the title companies have designed the Preliminary Title Report to protect themselves.  Title companies are nothing more than insurance companies and their contract excludes most of what a citizen needs coverage for in a title insurance policy.  Finally, the Closing documents are hopelessly complex to protect the interests of banks and financial institutions.

 Who is left out of this protection racket?  The common ordinary citizen.  Trumped-up complexity is the lifeblood of lawyers.  This thicket of sharp language is not just confined to everyday commercial transactions.  The complex papers devised by lawyers to resolve a dispute over these wordy contracts in court is the next subject for Theories for Legal Improvement.........and Revolution.   Watch for the next exciting chapter in how you can rid yourself of lawyers and their hold on society.  And I am one. 

This is the second article on "Theories For Legal Improvement  --  and for Revolution."  The first article explained why citizens do not need living trusts nor probate, both of which are gravy trains for lawyers.  This second article discusses why our legal system has it exactly backwards when it comes to settling disputes.  Our legal system often forces citizens to enter the legal system first before being able to have a mediated resolution of the dispute.  That is exactly backwards.  Every dispute should have a system of resolution available for use BEFORE entering the legal system.

    2.   ALTERNATE DISPUTE RESOLUTION  --  Assume you have a simple dispute with an acquaintance over something silly, but it escalates, such that one party takes the other to small claims court.  The small claims system in most counties will then divert the dispute to a mediator.  If the matter can't be settled, then it goes before Judge Judy.  Medium size civil disputes have a similar court-diverted arbitration system.  What if you have a dispute with your landlord over late payment fees and the landlord threatens eviction?  The landlord must file an "FED" eviction in court, then the matter is diverted to mediation and if the matter cannot be settled, the judge will decide.  Even a divorce must be filed first before custody and property division mediation occurs.

     It is clear what should take place.  Each citizen dispute should have a system of dispute resolution (often called 'alternate dispute resolution' which means mediation or arbitration) BEFORE court action is necessary.  Most corporations have figured this out years ago for themselves.  For example, you never see State Farm suing Allstate in court.  The reason you don't is because they figured out a half century ago that if the State Farm claim adjuster thinks the Allstate insured was at fault, and the Allstate adjuster feels the State Farm insured was at fault, they submit the matter to arbitration (with claim adjusters from different companies serving as the arbitrators in this private system) before court action. Thousands of inter-insurance company disputes are resolved this way each year without court proceedings. Imagine the Stepford  Homeowners Association having trained (nonlawyer) mediators available for resolving neighborhood disputes for neighbors in Cranford across town?  

     Banks and financial institutions also made a radical change of their dispute resolution systems forty (40) years ago when it comes to foreclosure.  Trust deeds are the banks way of kicking owners off their own property outside of court systems; if the owner can't pay the mortgage, for example.  It is called 'non-judicial foreclosure' and saves thousands of dollars of legal fees for banks and financial institutions when they must resort to the recovery of ownership of property in foreclosure.  Why has your lawyer-legislator not created a system of non-judicial resolution of simple citizen disputes for you then?   The answer is self-interest and greed. 

     Contractors also addressed this problem years ago, but even this system is messed up.  If a citizen has a routine dispute with a home repair contractor, for example, there is a dispute resolution system available through the Construction Contractors Board before either party has to resort to court action.  The problem is that many parties and judges do not know this dispute resolution system exists.  Where it is messed up is that either party may resort to the court anyway even though the dispute should be resolved without court action.  This is yet another legal arena where our legal system allows disputes to be handled backwards.  It is the tip of the iceberg.  There are many, many dispute resolution systems that nobody uses because lawyers and judges are comfortable with their own theater of operation and ignore the best way to resolve disputes. They do not care.  They are comfortable taking up citizen's money with business as usual, even at the highest level. 

     In most legal publications you will see advertisements from the shiny faces of self-styled mediators who invite you to resolve disputes through mediation or arbitration.  There are two problems.  There is no system of qualification to determine if any of these (usually burned-out lawyers or judge 'wannabees') mediators are any good at what they do.  Second, there is no system that requires mediation before litigation.  Thus, their siren call is just so much blowing in the wind.

     EVEN THE 'ANCIENTS' KNEW THAT LEGAL MATTERS SHOULD HAVE  DISPUTE RESOLUTION WITHOUT LAWYERS.  Eight hundred years ago, Norman Civil Courts required that parties plead their own cases without substitutes.  A century later the Norman court system required proxies to appear for the parties.  The headaches started immediately.  All citizens have a right to a system of dispute resolution without courts and without lawyers for virtually all matters that confront them in every day life.  These systems exist in some small corners of our life, but lawyers, judges and our legal leaders do little to facilitate dispute resolution without their active participation. 

     Note  --  This is article #2 in a series called "Theories for Legal Improvement  --  and Revolution."  The premise of both articles is to point out that in probate and simple dispute resolution there needs to be a revolution to enable citizens to handle their everyday affairs without lawyers, courts and judges.  Watch for the next article on other subjects.  Methods on how to commence a revolution on these issues will follow.  One person can facilitate change. 
 

    Our legal system is broken.  What follows in this series are specific, practical suggestions to improve our legal system locally and across the nation.  Voltaire observed that it is not so important to come up with a new idea;  it is more important to think of a good idea---again.  The 1970's produced small revolutions in the law such as no-fault divorce and no-fault recovery for auto accidents.  It is time to reexamine our legal system afresh, jettison that which just serves to make lawyers rich and improve that which is just.  This series is called  "Theories for Legal Improvement--and for Revolution". 

1.  Probate Court Should be Abolished   --  The biggest financial scam inflicted on the innocent public by our legal system is the  living trust  or more accurately called The Revocable Trust.  It is a financial bonanza for lawyers and does nothing for Mr. and Mrs. John Q. Citizen in ordering their affairs.  Why?  Because it should not be necessary to do them in the first place.  A regular will should suffice. 

Probate is a remnant of the past that serves no purpose.  When someone dies, the size of their assets puts them into one of three categories:

• Small Estate--If one's estate is worth less than about $150,000 there is a simple filing people can do themselves and that is the end of the matter.  It can be done by the oldest child, a close family member or whoever is appointed in a simple will by the person that died. 
  

• Middle Class America--If the person that died is worth between $150,000 to 2 million most lawyers recommend a living trust to avoid probate.  Avoid what?  Probate.  Probate only accomplishes two things.  It transfers title to the heirs and provides judicial oversight if needed.  IT IS NEVER (ALMOST NEVER) NEEDED.  Title can be passed by title companies without lawyers.   Millions of middle class suckers are paying lawyers from $500 to $3,000 to do a living trust that accomplishes nothing.  A regular will should cost no more that $200.  State legislatures across the nation should abolish probate for all estates less than 2 million dollars and in most instances it is not even needed for large estates. 
  

• Wealthy people need estate planning.  Middle class people need a simple will.  It is that simple. 
  

     The net result is that people are overpaying for a living trust when all that should be necessary is a regular will.  The elaborate legal paperwork for a probate estate is a total waste of time and money and that is why lawyers started using expensive living trusts to avoid probate.  The only people that benefit are the lawyers.  Unfortunately, the probate matter is often left for last in a lawyer's office when the calendar demands attention to more pressing matters that cannot wait.  Probate administration can always wait.  Moreover, a lawyer's fee bears no relationship to any benefit to those left behind.  In short, neither probate nor a living trust should be necessary for middle class citizens if probate was eliminated for all except large, complex estates. 

    WHAT CAN BE DONE?  --  It is up to the state legislature to eliminate probate for the middle class.  Each citizen who is contemplating a visit to the local lawyer's office to do their will should also write to your local legislator at the same time.  You can educate yourself on the issue by obtaining a brochure from your local bar association on three subjects; a simple will, probate, and a revocable living trust (living trust).  Virtually, all bar associations and all local lawyers have these brochures.  Then write your local legislator a polite, one-page letter advising them you have had it with paying lawyers too much for a living trust when all that is needed is a simple will   Then you should ask that legislator to join in the fight to abolish probate for regular folks with medium size assets. 

    This is the first of a series of thirty (30) suggestions for legal revolution.  We welcome your ideas and feedback.   One person can effect change. 

    (Some of these ideas can be found in Legal  Breakdown, Nolo Press, Ways To Fix Our Legal System--Make Law Fair, Affordable and Open to All)