Thursday, September 30, 2010

Another email to candidates

To: ___________
Sent: _/__/2010 ______M. Central Daylight Time

Subj: Voter anger and lawsuit abuse

Dear _______,

I am following up on earlier emailing I did.

Voters are angry in this election.

They are angry about an unaccountable federal government that has run up out of control deficits and national debt, that bailed out Wall Street with sweetheart deals and shortchanged Main Street, and that passed a health care law monstrosity a majority of the voters do not want. Voters are angry about their state and local governments that have gotten themselves in financial straits, with a main contributing factor being outlandish pension and medical retirement benefits promised to public employees to get their votes and their unions' support.

Another thing that voters can be angry about is the way the legal system is exploited by lawyers to enrich themselves to the detriment of society, enabled by judges and lawmakers who don't take steps to stop the lawsuit abuse.

This exploitation of the legal system is counterproductive to the nation's economic recovery. It engenders contempt for the law and it undermines business ethics. Justice is traduced in effectuating large transfers among non-wrongdoing parties (in order to provide lawyers large fees) and in not holding wrongdoing persons accountable.

At the beginning of this year I sent this email about plaintiffs' lawyers to over four hundred announced candidates for the US House of Representatives and Senate. Since then I have done further election campaigning that you may read about here.

As the election campaign enters its final month, I am continuing my efforts to get candidates to state their positions on lawsuit abuse for the benefit of the voters. I hope your campaign has done that or will do that before election day.

Thank you.
Rob Shattuck
Birmingham, AL

Tuesday, September 21, 2010

Suggested ERC white paper

Sent: 9/21/2010 5:10:12 P.M. Central Daylight Time
Subj: ERC white paper muscle flexing

Dear Dr. Harned,

The ERC's March 2010 white paper "Ethical Leadership and Executive Compensation: Rewarding Integrity in the C-Suite" ( is an exposition of policy and position by the business ethics community that trenches on the turf of management, stockholders, lawmakers and regulators.

This encroachment is justified because of the perceived relevance of corporate compensation to the mission of the business ethics community.

The following sentences from the white paper are indicative of its tone and thrust:
In our view, problems with compensation are symptomatic of the larger challenge of ethics.
If we want to encourage leaders to think of themselves as stewards, ethics and ethical
leadership belong at the heart of the compensation discussion.
* * * *
In hindsight, it is now plain that many compensation plans were flawed by poorly designed
incentives that allowed CEOs to win, but never lose. Particularly in financial service industries,
pay structures often encouraged CEOs to focus on short-term gain without regard to
its sustainability, roll the dice on high-risk strategies in order to trigger incentive pay, and
neglect long-term planning.
* * * *
But absent an ethical culture, even the best designed compensation plan can only do so
much. Barry Schwartz, a professor of psychology at Swarthmore, says the problem with incentives
is that “they get you exactly what you pay for, but it never turns out to be what you
want” because smart people figure out how to manipulate almost any numeric metric.
* * * *
Isn’t it really about ethics when:

Leaders expose their companies and employees to needless risk in order to
meet short-term financial goals?
* * * *
ERC recommends that a corporate board:

Establish an Ethics Committee of the board to monitor its own activity,
to assess the organization’s ethical culture, and to ensure that ethical leadership
is a priority for senior management
Recruit knowledgeable ethics professionals for board seats to provide
other directors with a strong understanding of how to make ethics part of
the organization’s culture

The ERC's white paper is commendably bold in claiming a stake of the business ethics community in the matter of corporate compensation and in vying to have its say about flawed compensation structures contributing to unethical behavior. The ERC's views may or may not coincide with the views of management, stockholders, lawmakers and/or regulatory agencies; the ERC is staking out an independent stand regardless.

I have contended that there is a flawed compensation structure in the operation of the civil liability system, and that this operates to undermine business ethics. See Does the Civil Liability System Undermine Business Ethics? . The civil liability system is a domain in which judges, lawmakers, corporate management, the US Chamber of Commerce, plaintiffs' lawyers, and others have a significant interest and have views . If the system undermines business ethics, the ethics community also has a stake and should have a say.

I hope the ERC's bold intrusion into corporate compensation signifies that it may be prepared to make a similar intrusion into the domain of the civil liability system, its flawed compensation structure, and its adverse effect on business ethics.

I urge the ERC to undertake a white paper on the subject in the same way it has regarding corporate compensation. In such an initiative, the ERC should seek input from the US Chamber of Commerce's Institute for Legal Reform and other specialized resources of information and expertise.

Thank you.

Robert Shattuck

Follow up email to Conference Speakers

To: __________

Subj: Two ECOA conference speakers replied
Dear ____________,
I wish to thank two speakers who indulged me with replies to my previous email and to share with you some of the resultant email correspondence, in the hope that the subject matter is or will become of interest to you. The email correspondence in question can be found here.
Thank you.
Rob Shattuck

Saturday, September 11, 2010

Speaker emails

Two of the 2010 conference speakers have replied. Below is email correspondence from that.

[first speaker]

From: _________________
Sent: 9/3/2010 8:17:36 A.M. Central Daylight Time
Subj: RE: To ECOA 2010 conference speakers

Dear Mr. Shatt:

Thank you for your email. I do not believe that I received your previous email that you indicated was sent to all speakers at the Chicago ECOA conference.

In any case, I have read your email as well as the supporting arguments that you made on your blog.

I am afraid I cannot agree with your arguments as presented. Your proposition that civil law liability is antithetical to promoting ethical conduct by business or deterring them for being unethical is not supported by any evidence or logic theory. Instead, you present it as “self-evident” truth and as a matter of strong belief on your part. Given this level of faith in your belief, I cannot see how a reasonable argument can be made as part of thoughtful discourse.

Taken at face value, and extended to other arenas of unlawful or unethical behavior, you would suggest that white collar crime can best be eliminated or reduced by allowing criminals to continue with their behavior. And that any indication of punishment would encourage them to continue with their unlawful conduct because it is profitable.

Furthermore, you are concerned about the compensatory aspects of the law that provide at least some restitution to the victims. Why not make a counter arguments that a higher level of punishment, both monetary compensation and even prison time, would serve as a deterrent to dissuade unethical conduct prohibitively expensive.

I am not suggesting that you are wrong, but simply that your arguments are just assertions which must be proved.

May I suggest that you reach out to ECOA leadership, or for that matter, ask some members of the business community, to organize a panel to raise and discuss these issues. However, to do so, you need to make sure that the sponsors of such a discussion panel are not merely interested in it as a matter of self-interest, but are concerned about it as a matter of wise public policy that would promote social good.



To: __________
Sent: 9/6/2010 4:17:20 P.M. Central Daylight Time
Subj: Re: To ECOA 2010 conference speakers

Dear ______,

Thank you very much for taking the time to reply.

We may have a misunderstanding related to the fourth paragraph of your email.

I strongly believe financial penalties, liabilities, criminal punishments, and other sanctions are needed and should be imposed. That being said, I think a paramount question, whether the criminal law or the civil law is involved, is the extent to which enterprise level penalties and liabilities are sufficient, and, if not, the extent to which corporate officers and employees need to be held personally accountable and penalties and liabilities must be imposed upon them to achieve a satisfactory deterrent effect.

It is true that I have some strong beliefs, and that they have as a starting point common knowledge about human nature, to wit, that, in human nature, self-serving motivations are powerful and predominant, and altruism is weak.

If that is a fair evaluation of human nature, it immediately raises the questions posed above about whether enterprise level sanctions will suffice, or whether they are insufficient, because of human nature that can be too inclined to pursue self-interest and, in doing so, to discount costs and risks as long as those will get imposed on others and not on one's self.

I don't think I am taking undue liberties in my argumentation that starts with the foregoing common knowledge about human nature. I think I have as much evidence and logic that backs up my argumentation as have the authors of the Ethics Resource Center March 2010 white paper entitled "Ethical Leadership and Executive Compensation: Rewarding Integrity in the C-Suite" (, who say this:
From across the spectrum of experts and advocates, of political leaders and ordinary
citizens, there is a belief that executive incentives have overemphasized short-term performance,
encouraged excessive risk-taking, and failed to penalize poor performance. Many
believe that incentive plans have tempted some CEOs to put personal financial interests
ahead of good stewardship that serves the long-term interests of their organizations.

I have been endeavoring for three years to reach out to the ECOA leadership, but they will have nothing to do with me.

If you are interested, you may learn the gory details by scrolling down through my blog entries that appear here.

Again, many thanks for replying.

Rob Shattuck
[please note that my email address represents a shortening of my last name Shattuck]

[second speaker]

To: __________
Sent: 9/5/2010 10:48:08 A.M. Central Daylight Time
Subj: Re: To ECOA 2010 conference speakers
Here is my quick reaction:

Plaintiffs' lawyers don't care about compliance. If there is an opportunity they will take it.

A compliance program may be helpful if a case gets to a jury.

Your concerns would be best addressed in a scholarly article. The ECOA conference is aimed at practical concerns.

There is nothing that a compliance officer can do with regard to class actions, so it would not be something they would worry about.


To: _____________
Sent: 9/9/2010 7:26:53 A.M. Central Daylight Time
Subj: Re: To ECOA 2010 conference speakers

Thanks very much for replying, _______.

Are you referring to plaintiffs' lawyers not caring about compliance by themselves or not caring about compliance by other parties? If the latter, can I interpret your comment to mean that, in prosecuting their class action and other litigation and how they endeavor to shape the civil liability system, plaintiffs' lawyers don't care about how they impact compliance and/or business ethics?

I have attempted a scholarly article, but I think I lack needed credentials to get it published. Here is link to my article:

I appreciate that, within the business ethics community, there is a range of perspectives, from the more practical to the more theoretical (which latter may be a basis for advocating change to improve ethics and compliance). I further appreciate that the ECOA probably has a more practical bent.

In recent years there has been a lot of theoretical consideration of how the criminal law can most effectively foster ethics and compliance. How much the ECOA has sought to inform its members about the various theories, I cannot say offhand. I would think ethics and compliance officers would have an interest in learning about the theories, and that knowledge about the same could be helpful to them in doing their jobs. I would like to think the same about my theorizing about the civil liability system.

Further, I think ethics and compliance officers, with their frontline experience with the conduct of corporate officers and other employees, and the factors that influence the same, are a very important source of information and evidence for evaluating theories about how the criminal law or the civil law can possibly be improve to better foster ethics and compliance.

Again, many thanks for your replying.

Rob Shattuck

To: __________
Sent: 9/14/2010 5:20:14 A.M. Central Daylight Time
Subj: Re: To ECOA 2010 conference speakers

Thank you very much for replying again, _______.
I posted your first email on my blog (without identifying you) prior to seeing your second email. See Would you prefer that I remove your non-attributed first email from my blog?

From a compliance and a compliance officer's perspective, do you think it is objectionable the extent to which class action lawsuits get settled (usually with no admission of wrongdoing), because such settlements on a pervasive basis generate significant uncertainty about what is and what is not permitted under the law, such uncertainty greatly complicates compliance (because what is or is not permitted under the law does not get determined in particular cases to provide guidance to company lawyers and compliance officers), and, in the face of such uncertainty, compliance becomes based on an irrational in terrorum reaction to the legal uncertainties?

Rob Shattuck

To: _____________
Sent: 9/14/2010 4:25:11 P.M. Central Daylight Time
Subj: Re: To ECOA 2010 conference speakers

Thanks once again, ______.

I am a retired lawyer who has had no experience as a litigator. I got onto the business ethics subject because I thought I discerned that it could provide novel argumentation against plaintiffs' lawyers, which argumentation I have articulated in my article Does the Civil Liability System Undermine Business Ethics? .

I have made little headway in propagating my argumentation.

I consider it progress in eliciting from you a view about whether there is a connection between compliance and uncertainties about the law that results from widespread incidence of legal settlements which are made without determinations or guidance about what is and what is not permitted by the law.

My lack of experience as a litigator includes a lack of experience in evaluating, on behalf of a corporation, relevant case law and known litigations, judgments, verdicts and settlements, and, based thereon, advising compliance officers and other corporate employees about what is and is not permitted under the law and what their activities for the corporation need to be in order to be in compliance with the law.

As a layperson, I have done a lot of review of class action lawsuits of which I have received class action notices (these are catalogued under labels J and J0 through J91 on the left hand side of How To Combat Plaintiffs' Lawyers) and of other lawsuits, such as are chronicled at

Possibly there are few corporate officers and employees who have awareness of, give thought to, and, consciously or subconsciously, incorporate in their thinking and decision making processes understanding of how the law does not hold personally accountable wrongdoing officers and employees and instead allows risks, costs and liabilities to be shifted to non-wrongdoing persons.

Ethics and compliance officers have frontline involvement for having views about the foregoing. I am appreciative that you offered me your views, but virtually no one else has. I will probably continue in my quest to elicit views from other ethics and compliance officers, as well as academics and others.

Rob Shattuck

Sunday, September 5, 2010

To ECOA 2010 speakers


Subj: To ECOA 2010 conference speakers

Dear _______,

I continue to endeavor to propagate argumentation that class action and other civil lawsuits undermine business ethics. (See
Does the Civil Liability System Undermine Business Ethics? )

In connection with this year's ECOA conference, I identified Mr. Greg Andres of the Justice Department Criminal Division as a speaker whose topic and background seemed auspicious for seeking to obtain his perspective on my argumentation. I have sent Mr. Andres this

In connection with last year's Chicago conference I wrote numerous speakers emails trying to connect my contentions with their respective presentations. You may find these emails
here .

None of last year's speakers replied to me, and I wish to ask this year's speakers this question: Why the lack of interest by business ethicists in my argumentation about the system of civil law liability?

One explanation could be that the compensatory purpose of civil law liability is paramount, a deterrence objective is secondary, and that makes the civil law liability system a nut that is simply too big for business ethicists to try to crack.

A "too big a nut to crack" reaction would be unfortunate, given the large amount of corporate resources that are consumed in the civil law liability arena, a lot of which may be wasted or counterproductive to ethical objectives.

If my argumentation is correct about the undermining of business ethics, it would seem that ethicists would want to call this to the attention of management, the judiciary, and lawmakers, to the effect of "we ethicists recognize the primacy of the compensatory purpose of the civil law liability system, but you should recognize that the system undermines ethics and does not achieve a deterrent effect. In your management, judicial and lawmaker roles, you should be clear about that, and in your policies, actions, and decisions, you should limit your concern and objective to solely that of accomplishing appropriate compensation for loss. If you limit yourself that way, it could alter your actions and decisions in a way that results in a lesser detrimental impact on business ethics."

To the extent my argumentation is debatable, it would seem that business ethicists would want to debate the same, try to reach conclusions, and decide whether or not to follow the suggestion in the preceding paragraph.

It further needs to be acknowledged that plaintiffs' lawyers are a powerful adversary with whom business ethicists may not want to tangle, and further ethicists may not desire to get in the way of management that has its own ideas and agenda about plaintiffs' lawyers or in the way of the US Chamber of Commerce's
Institute for Legal Reform

If you think there are other reasons for the lack of interest, I would be very interested in hearing of them.

I hope the ECOA has a terrific conference in Anaheim.

Robert Shattuck