Commercial litigation has become a battleground upon which wealthier companies and individuals use their comparative financial strength to manipulate the American judicial system and, in so doing, thereby distort the American economy.

While justice may well be blind, the cost to litigate a commercial dispute extracts a high entrance fee to determine who is right and who is wrong, and this entrance fee is increasingly prohibitive.

To combat this slowly metastasizing cancer at work in our economy, we need publicly funded attorneys to represent the "little guys." Although the concept of publicly funded attorneys for commercial litigation is admittedly heterodox, like the perennial issue of tort reform, the direct beneficiary of publicly funded attorneys would be the economy.

In order to understand the impact that the high cost of litigation has on the American economy, a preliminary example is warranted. If Company A with net profits of $4 million enters into a contract with Company B with net profits of $200,000, all things being equal, Company A has more money to pay lawyers if Company A and Company B became embroiled in a dispute. This "competitive" disparity is not new to the marketplace. Implicit in American jurisprudence, however, is the notion that the litigant should not be able to use the threat of litigation as a means of exploiting a commercial advantage over others on the marketplace.

This is not simply a revamp of the Marxist tenet of the oppression inherent in a system of justice operating in a capitalist economy. While it arguably is "unfair" to allow a company to use its superior financial position to thwart the intentions of a party to a contract, it also disrupts and distorts the free market system. And it is this distortion of the free market system that is more deleterious to the American economy that any amorphous concept of the normative theory of justice in a market-based economy.

This disruption occurs in the same way that a crime disrupts the free market system. Whereas, if one party to a business transaction can breach a duty or obligation to which it had erstwhile agreed, and do so without any repercussions, then not only will the "victim" be adversely affected, so to will the entire market. The disruption will evidence itself in an increase in the cost of goods.

But if one firm can cause an unrecoverable loss, then a situation exists that is substantively similar to the increase in prices that is the result of shoplifting. Whereas the retailer can recoup its cost only by increasing the price of its goods, the small business can recoup the cost of being unable to fight certain legal battles only by increasing its costs.

A business that has small profits cannot afford to have its pricing structure adversely affected to too great a degree. Assuming that the price of the product was appropriately set by the market, a distortion of the market price (increase) may lead to fewer sales, which if persistent will lead to a cessation of business.

Though the ability to distort the market is present in all forms of dispute, it has its greatest impact on those transactions in which the amount of dispute is relatively small compared to the amount of attorney fees to be incurred. Whereas a company may find other sources of funding to insure that a huge lawsuit does not bankrupt the company, when the amount at stake is relatively small the perceived need for alternative funding is not present. Consequently, many times the small company or individual will recognize that since the cost to litigate will be equal to or less than the amount at stake, it will simply "write-off" the loss.

A solution to this problem in our economy would be the public funding of attorneys in commercial disputes. Since this problem affects society and the economy as a whole, attorneys will be available in all commercial disputes regardless of individual and/or corporate wealth. Because the problem affects interstate commerce, the attorneys will be funded by a national sales tax and will be administered by a federal program.

Compensation will be paid to attorneys on a basis of a flat fee of $2,500 for disputes between $0 and $5,000; $5,000 for disputes between $5,000 to $10,000; and $10,000 per case for matters greater than $20,000. An alternative plan would be to pay $5,000 plus a percent of recovery to the individual attorney up to 33 percent for cases above $10,000.

The lawyers will be either appointed out of a pool of attorneys that register with the newly created administration or the money can be distributed as a lump sum to the attorney hired by the individual litigant. If the litigation fees exceed the statutory amount, the burden is on the litigant to pay the balance of the attorney fees.

Though this program would not be without its problems, it is a much needed first step in assuring that the American free market system is not disrupted and distorted by the improper use of the demands of litigation costs.

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