OK, Here we go.
Title Insurance over the past few decades has become the standard method of guaranteeing that the guy who sells you land really owns it and has the power and authority to sell it. Up until realtors and interstate mortgage lenders fell on the highly profitable device of title insurance the question was handled by having someone write a summary of all the documents in the local court house concerning the land and its owners and then having a lawyer review the summary to make sure every thing was in order, or if it was not in order to specify what needed to be done to put it in order. Title examination was a mainstay of the law business for years and the “abstract and opinion” system resulted in clear titles. The guy who prepared the summary and the lawyer who examined the summary, however, both wanted to be paid for their efforts. A fair number of people thought this was unfair. I suppose the same people think it unfair that the mechanic who looks over a used car they want to buy charges for it. In any event, enter title insurance – insurance against a minimal risk since there is little or no effort to try to find out if there are any defects in title, because adverse claimants seldom assert their claims. It’s probably more expensive than the abstract and opinion system, certainly no less expensive, but it doesn’t look like it because the cost is hidden in the closing costs.
Title insurance is favored by real estate agents and mortgage companies for one simple reason: Money. The premium is split between the real estate agent, the mortgagee and the title company. For the title company it is almost all profit and for the mortgagee and the real estate agent it is better than profit, it is a kick back.
As far as the idea of the government being responsible for guaranteeing real estate titles, the concept is based on a flawed understanding of what the county deed recorder does. The recorder does not fix titles or guarantee them. The recorder is a repository for documents and provides an indexing system. Nothing more, nothing less.
Class action law suits. Class actions exist because there as some situations in which a single person or business screws a whole bunch of people but screws each one just a little bit. It is not economically feasible to prosecute those cases unless a whole bunch of tiny claims can be lumped together in one lawsuit. Typically each claim is less than $100.00. I suppose that once in a while class action comes down the pike that has significant individual damages of more than small claim dimensions but they are few and far between. None the less, it cost a fair amount of money and requires and enormous amount of work to crank up a class action. In all the class actions I know of the amount of fees is subject to court supervision. It should be no surprise that the attorney’s fees are wildly larger than the individual recovery just because the hurt done to each individual member of the class is so small. The attorney’s fees gripe, however, misses the point of class actions. The objective is to mass a bunch of small claims to make it worth the defendant’s time and effort to quit doing whatever it was doing and to pay some recompense for past bad acts.
Class actions keep big business honest. This is why big business hates class actions and why a considerable effort has gone into persuading the public that they are unfair because the lawyers get a fee that is disproportionate to the recovery of any one class member. Some how I doubt if big business much cares what each member of the class gets. What they want is not to pay anything at all and to continue to cheat the public is small ways.
Let us get another thing straight. Lawyers do what they do as a business. Just like doctors, plumbers, car salesmen, carpenters, insurance sales men, accountants, and what have you. Most lawyers have a pretty heavy overhead. Rent for the office, electricity and gas, employees’ salaries, business, property and malpractice insurance (yes, malpractice insurance and that’s what backs up the title opinion, too), library, equipment and literally hundreds of other expenses necessary to keep the doors open. The typical small rural practitioner see about half his gross income going to meet expenses before he puts a dime in his pocket. That is before taxes. It’s not as if the lawyer is practicing out of the back seat of a station wagon parked along the interstate. Your doctor probably charges you $75.00 for an office visit that takes less that five minutes of actual doctor time. But you medical insurer or some social security program probably pays the bulk of those charges. None the less I frequently see repeated unnecessary office calls office calls before tests, after tests and to review tests. Unconscionable over billing is not restricted to lawyers. Take two of these every four hours and come back next week and we will see how you are doing.
Life in a civilized society is complicated. You can get through it without lawyers but don’t count on it. As Muffin said, you can buy a house without a lawyer, you can get divorced without a lawyer, you can defend yourself from an accusation of crime, you can drag yourself through bankruptcy, you can set up your own corporation. I suppose you can remove your own appendix for that matter. Without help I would not count on doing it right.
