Their own petard - The New York Times's columnist Bob Herbert

Reason, Jan, 1998 by Walter Olson

The Canadian press buzzed with indignation for months over what happened to Loewen, just as the British press has over British-company cases. Britain's Commercial Lawyer magazine says the Meineke case signifies that in America plaintiffs can "successfully argue that the contract requires the opposite of what it states."

"The U.S. has, without comparison in the developed world, the highest degree of systemic risk posed by frequently arbitrary, severe and unquantifiable litigation," says Thom PLC's bond manager. "Some investment bankers claim these legal hazards have become a powerful deterrent to smaller companies contemplating U.S. expansion," reports London's Financial Times. "Companies will pull back from a deal rather than trust the U.S. courts," says one merchant banker. Americans wind up paying the price. "The abrupt slide in Thorn bonds has prompted investors to question whether they are taking sufficient account of the risk of lawsuits when they invest in companies with exposure to litigation-mad America," reports London's Evening Standard. "The Thorn case may well encourage investors to demand higher coupons [interest rates] from corporations with large U.S. interests." Translation: a higher cost of capital for companies operating here, and a discouragement of investment in this country.

No word yet, though, on whether Britain or Canada will back up their outrage with threats to aim trade sanctions at us if the mega-verdicts continue, the way we successfully did with Ecuador.

The Paula Jones case, as is only too well known, has likewise served to direct the attention of some Clintonites to the problem of how easy we make it to sue nowadays in this country. A less-publicized case, which has the further merit of being a lot easier to discuss in polite company, is the burgeoning controversy dubbed Chefgate. According to a recent Washington Times report, the White House quietly paid $37,000 to former executive chef Pierre Chambrin after ousting him in 1994 to make way for an American cook, in exchange for his pledge to refrain "from discussions with members of the press about his resignation."

But Chambrin was later called as a witness in a lawsuit by a lower-ranking chef who is suing the White House in a discrimination case, and wound up answering questions under oath about why he had been forced out earlier. "I think the reason they didn't want me again is because, even if I [have] been an American since 1977, I didn't fit the profile of the chef of the White House because of my accent and the fact that I'm overweight," said Chambrin, testifying in what the Times called "broken English."

Of course federal anti-discrimination law, with the enthusiastic support of the Clinton administration, has in recent years expanded to include as protected categories both obesity and accent. Maybe the Clintonites should worry about being served con fit de petard.

Contributing Editor Walter Olson (hambo@eci.com) is the author of The Excuse Factory (The Free Press) and a senior fellow at the Manhattan Institute.