Spotlight: Entrepreneur of Justice

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It's no news that our court system is a mess. Costs are high, delays interminable, and actual trials few and far between. What's news is that someone has set out to do something about it. That someone is maverick lawyer-turned-entrepreneur Carl E. Person.

What Person (pronounced peer-son) has proposed is the National Private Court—a profit-making alternative to government courts for resolving civil disputes. Parties choosing to use his court can count on a firm, legally binding decision within three months—for under $1000, says Person.

What he is proposing is actually a form of binding arbitration. But it differs from conventional arbitration in several important ways. Arbitration usually dispenses with strict legal procedure and seeks to reach a compromise settlement. NPC, by contrast, will follow federal rules of evidence and federal rules of civil and appellate procedure. Hence, the parties can draw on a vast body of existing law and will be able to predict outcomes more reliably than under binding arbitration. Being based on federal procedural law also makes the decisions appealable, unlike most ad hoc arbitration verdicts.

Parties wishing to use NPC will choose a mutually acceptable judge from the company's roster of qualified attorneys. So far Person has signed up 30 of them, including two retired New York State Supreme Court judges. The contending parties will also select in advance a three-judge appeals panel, just in case. (That's the only appeal allowed, by agreement.)

The judge will hear the case in his law office (no fancy buildings need be built). He will be paid an hourly rate (up to $100 an hour) by the two parties, to hear arguments, listen to and question witnesses, read the briefs, and make a decision. NPC will collect a portion of the judge's fee for its services in setting up the system and bringing the parties together.

Once NPC has amassed a track record, Person thinks many businesses will incorporate an NPC arbitration clause in their contracts, as many do now with American Arbitration Association clauses. But even in the absence of prior agreement, he expects many firms to take advantage of NPC as an alternative to the courts. Besides being faster and cheaper, NPC permits the parties to choose a judge who is experienced in the particular field of law at issue. Also, since there is no public record of the decision (only of the final judgment), the loser can avoid adverse publicity. Further, since arbitration decisions involve only the case at hand (no class actions, and no precedents), they can more readily limit the loser's liability.

After several months of "pre-trial publicity," Person is now embarking on NPC's first marketing campaign, sending several thousand litigants in the trial courts and federal courts in Brooklyn and Manhattan his booklet, "How to Complete Your Pending Lawsuit in 2-3 Months." Once the private court concept is operational in New York, he plans to bring it to California and after that, to the entire country. By operating the National Private Court on a nationwide basis he hopes to assist in breaking down state restrictions on the practice of law by non-residents.

Marketing legal services is nothing new to Person, who was one of the first attorneys in the United States to challenge the bar association's ban on advertising. As far back as 1968 he was taking courses at NYU in mail-order and direct-mail marketing. Always something of a maverick, he dropped out of high school but graduated magna cum laude from Long Island University in 1959 and was in the top third of his Harvard Law School class.

His first job after graduation was with the New York law firm of Mudge, Stern, Baldwin & Todd—among whose principals was Richard Nixon. His several years there convinced him that the major institutions of business law—prosecutors, attorneys general, courts, bar associations, and regulatory agencies—serve mostly to protect established firms from the rigors of competition. He decided then to strike out on his own, hoping to "use capitalism to check the excesses of capitalism."

One of his first projects was to create the Paralegal Institute—an educational institution that trains students to become paralegal assistants. In a business, a paralegal can carry out many of the tasks normally given to a corporate counsel, at a fraction of the cost. In his 1973 book, How to Beat the System and Get Rich—A Paralegal Strategy for Achieving Business Success, he described the anti-competitive nature of the status-quo business community and the use of paralegals to enable small firms to fight back.

"I believe in capitalism," he affirms. "I believe in free enterprise and competition—and I believe we haven't had any in quite awhile. I'm trying to change that." In his view, a key to freeing the business marketplace is opening up the legal marketplace to competition and entrepreneurship, so that justice is available to all, not just those with wealth and political connections.

These concerns are evident in Person's latest project: selling shares of stock in a costly lawsuit. When he found that the costs of representing a small inventor suing Parker Brothers could run between $20,000 and $30,000 a year over a number of years, he put together a prospectus to raise the money. By raising $500,000 (in $5 shares) and investing it in government bonds, he hoped to garner enough interest to pay the costs of the suit—even if he lost the case. Although not enough investors responded, the prospectus was approved by both the SEC and a federal court in Brooklyn.

Person attributes the failure to inadequate marketing, and has proposed setting up a brokerage firm to market shares in future lawsuits. His Lawsuit Securities Company would exist to finance meritorious lawsuits for profit. "We want to open up access to the courts," he says. "There have to be ways made so the average person has recourse to the courts."

Only 40 years old, Person shows no signs of slowing down. Working 17 hours a day, the (unmarried) Person makes most of his money training the 60-odd paralegal students in attendance at his Institute. But his overriding passion is developing new means of making justice more available. Whether it's selling shares in a lawsuit, suing a bar association, or creating another new type of business, the common thread is the search for lower-cost, more accessible justice.

What is Person really after? He wants to create "…a market for rights—an alternative to government monopoly on justice." Then he adds with a smile, "One hell of a concept, isn't it?"

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