Forgive me in advance for this next entry, civil justice fans. I know it’s unseemly to toot one’s own horn (though rest assured, I am also tooting it for civil justice!).
I got a little op-ed published in the Legal Times today. In broad terms, it’s about the incredibly powerful role the tort system plays in deterring bad behavior, and how harmful it would be to consumers if our newly elected officials took steps to diminish that in any way.
More specifically, it’s called, “How to Stop a Meltdown” and it picks up where this blog left off.
It’s about how the whole “subprime meltdown” might have been avoided if there had been an added layer of accountability known as “assignee liability,” (and don’t worry, I’m a civil justice guy, not a money guy, so reading it won’t lead you too far into the financial weeds!).
To read it, you will need a subscription—but sign-up is free (like the best things in life!), so you can keep your wallet in its holster! CJ&D also posted a copy here.
Anyway, here’s a sample (toot, toot!):
One of the most important functions of our legal system is deterrence of practices that pose a real risk of harm. But as must seem obvious, deterrence wasn’t working when it came to the subprime mortgage meltdown. Banks and lenders lent hundreds of billions of dollars in home loans with terms that made them incredibly risky. Wall Street, in buying up these loans, encouraged this reckless lending behavior. When homebuyers started defaulting, investors were stuck with potentially worthless mortgage notes, and taxpayers were left holding the “bailout” bag….Had those who profited from these risky loans been liable, through the legal doctrine of assignee liability, many experts now believe that these big financial firms would have been far less likely to have encouraged this type of lending, possibly preventing the entire crisis in the first place.
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