Justice Delayed is Justice Denied

Justice is too often delayed. The legal system in the United States is just that . . . a legal system. It is not a system intended to “do justice”. Don’t get me wrong, justice does occur in our system, but not by design.

The system is geared for delay. Contrary to how it appears on the TV shows the “Good Wife”, “Law and Order”, or any other legal show, there are few, if any, cases that are over in 45 days, let alone 45 minutes. The pace of most litigation in the United States takes years, not months.

There is an old axiom: “Justice Delayed is Justice Denied.” If that is true, justice is almost always DENIED.

It does not matter what area of the law we speak about today. In New York State, civil litigation takes YEARS to finally come to an end if a jury trial is needed. It takes years, not months or days. It can be upwards of 3-5 years before a plaintiff, looking to recover for damages he/she may have sustained, to finally get “their day in court”. Is that Justice? When I say plaintiff, this refers not just to individuals, but businesses also.

Let’s say you are a small business vendor who has a contract with another business to deliver to them goods and/or services. You deliver the goods and/or services in a timely manner, so you expect to be paid accordingly. Well, many times that bill is not paid timely. Now what do you do?

You hire a lawyer to help collect what is due you. The attorney sends out letters, starts a lawsuit. What do you do in the meantime????? You wait and wait and wait. Unfortunately, your suppliers who originally sold you the goods, or your employees who performed the services needed do get paid. They are not interested when, or even if, you get paid. Employees want their paychecks and your vendors want to be paid or they will not do business with you any longer.

You are now “carrying” an account receivable that is worthless until you get paid. You cannot “deposit” an account receivable; you cannot give it to your employees in lieu of salary; nor can you give it to your supplier as payment. You have to “fund” all of the above until you are paid or risk damage to your own financial history and reputation. If you are a small business, you may have to obtain a business line of credit from your bank to “fund” your sale, which costs you additional money because of interest and bank fees, not to mention your time lost.

But now let’s go back to the hiring of the attorney to get your money. In most cases, the attorney will take a percentage of any recovery (the percentage varies) as well as disbursements. The litigation commences and in the end, 3 years later, you agree to accept 80% of the amount you are owed.

So, as for illustration purposes, lets say you bill a customer $10,000.00 for goods and services, and the attorney takes a 1/3 contingency fee and has $1,000.00 in disbursements. Of the $10,000.00 you are owed, you receive as a gross settlement $8,000.00, less the disbursements of $1,000.00 ($7,000.00 net) less 1/3 for the attorney ($2,333.00). Therefore of the 10,000.00 you are owed, you receive only $4,667.00, which is LESS THAN ½ OF WHAT YOU WERE ORIGINALLY OWED!! Most businesses work on a very tight profit margin. Under this example, most businesses will have lost money on the transaction!!!! But to add insult to injury, the deadbeat who owed you the money, had the benefit of the use of YOUR MONEY for the three years it took to resolve the matter. This is “JUSTICE DELAYED, JUSTICE DENIED”.

This seems to be fundamentally unfair. Well, it is! The business that delivered timely and performed all its responsibilities under the contract actually LOST money because it adhered to the contract. Enough transactions like this can put small businesses out of business very quickly.

“Justice delayed, justice denied” does not apply only in the business world, but also in the arena of personal litigation.

Let’s say you are in a car accident and the insurance company does not want to settle. Five years later you go to trial and receive a large verdict in your favor, money that you need and can use. You can not wait to get the money. You don’t even mind paying your attorney their fee. You wait for your attorney to call and say come get your check. Unfortunately, the call you get is that the defendant is filing an appeal. An appeal you ask, what is an appeal and who pays for it?

Any person who loses their case at trial, whether a plaintiff or defendant, has the right to appeal to the New York State Appellate Division within 30 days after the judgment is entered. That doesn’t sound so bad until you learn that this only STARTS another clock, which also can run for years. As for who pays for it, unless you have a special arrangement with your attorney, you do. The attorney should require you to sign a new Appellate retainer, which is above and beyond the original retainer you signed.

As a general rule, in the Second Department which consist of Suffolk, Nassau, Queens, Brooklyn and a couple of up-state counties, the appealing party then has six months to file their brief as to why the lower court decision should be changed (reversed). The winning party below then has 30 days to file their response and the losing party then gets an additional 10 days to respond. You are looking at over seven months.

But what happens if the losing party who is appealing does not file their brief within the 6 months allotted. They can, and will often be given, multiple extensions to file their brief. This could add months to the timeline above. Let’s assume that the extensions total 3 months (this is not an unreasonable assumption). It will now take 10 months before the appeal can be allowed to be calendared to be heard before the Appellate Division (Justice Delayed is Justice Denied).

So you ask, how long before an appeal is calendared to be heard before the Appellate Division in the Second Department of New York. IT CAN TAKE UPWARDS OF ONE YEAR! You are now over 18 months since you were awarded a judgment and still have not seen a dime.

You wait is still not over. It can take the Appellate Division 2 to 3 months to make a decision. If you win on appeal, you have now probably waited 2 years to receive the proceeds from the jury verdict in your favor (the positive side is that you would be entitled to interest on your judgment at the statutory rate of 9%).

You have waited 2 years to be paid on a case that you won, with all of the added anxiety and cost of any appeal. The system of delay in the courts dictates this. Justice delayed is truly Justice denied.

 

“Justice Delayed is Justice Denied” Was Written by Michael B. Schulman

Making a Contract With a Liar

Has a person ever convinced you to enter into a contract based on false information he or she has given you? If so, you may have claim against that party. The Claim is called “fraud in the inducement”. In order to have a claim, a person must intentionally and deliberately make a “material” misrepresentation to you; and the misrepresentation causes you to enter into a contract. In other words, you must have relied on the misrepresentation. The misrepresentation must be deliberate and intentional. A mere mistake may not rise to the level of fraud.

Not all misrepresentations are “material”. A simple definition as to when a misrepresentation is considered “material” would be if you had known that the information given to you by the other side was false, you would not have entered into the transaction. A “material” misrepresentation would be if a home seller told you that the roof was free of leaks, and it was not. A misrepresentation that the master bedroom is painted beige and it is really painted orange would not be considered material.

It should be understood that even if the other party makes a “material” misrepresentation, you could not claim that you relied on false information if you had the ability check the accuracy of the “facts” on your own. For instance, if you are buying a house and the seller says that there are four bedrooms and there are only three, you had the ability to verify the information prior to entering into the contract. Also, if you have a reason to believe that the representations presented to you are not accurate, then you must put in an additional effort into investigating their accuracy. Basically, you cannot stick your head in the sand and not do your own investigation, whenever possible and feasible.

The same is true in business. If you are buying a business and the seller tells you that the company has annual sales of $1,000,000.00 per year and the sales are only $100,000.00, this is a “material” misrepresentation. If seller represents to you that they have leased space of 50,000 sq. feet and it is really only 45,000 sq. feet, that may not be considerable a “material” misrepresentation.

It is very important that before you enter into a contract, you investigate the accuracy and truthfulness of the representations being presented to you, especially when you have reason to be suspicious.

If you think you have been deliberately misled on a material fact in order to influence you to enter into a contract or your are not sure if you have been persuaded into entering into a contract by fraud, you need an attorney to represent you.

Making a Contract With a Liar was Posted by Michael B. Schulman, Managing Attorney

 

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