There are many reasons why the United States has been a fertile field for entrepreneurs: flexible capital markets, a culture that supports taking risks and is accepting of failure, and a regulatory system that is less oppressive than most countries.

However, there is one area in which the United States is much worse than other countries in ways that discourage and destroy many new ideas and businesses: litigation.

In a recent book, "The Rule of Lawyers," Walter Olson details some of the worst abuses.

He reviews the billions of dollars that flow from businesses into lawyers' pockets and how little may actually make it to "victims." He cites several examples where lawyers in class-action suits were paid millions of dollars and the "victims" received no compensation.

There are examples in which the business won its case and was proved innocent but went into bankruptcy due to the cost of defending itself. Unlike the English legal system, in which the loser must pay the winner's costs, the United States allows lawyers to pursue even a preposterous case in which the lawyers may make millions if they win, but lose only time if they lose.

Similarly, punitive damages can kill businesses and jobs. One business dispute cited in the book had actual damages of $637.99, but the jury attached punitive damages of $36 million.

Olson also shares examples of judges who are elected to their positions and whose political campaigns receive sizable contributions from the very attorneys whose cases they will hear. In some locations, lawyers account for more than 75 percent of campaign donations.

Lawyers often select sites for trial that have a history of awarding enormous damages to plaintiffs. Fayette, Miss., has a population of 8,385, but since 1995 more than 21,000 persons have filed lawsuits there, most claiming injury from prescription drugs or asbestos.

Perhaps the most egregious examples were illustrated by breast implant litigation. By carefully selecting the sites where the cases were heard, selecting experts who presented biased data well and appealing to the emotions of the juries, lawyers won billions of dollars in payments. Companies went bankrupt, careers were destroyed and thousands of jobs were lost. Unfortunately, time has proven that the jury decisions were wrong. Contemporary research suggests that plaintiff lawyers used flawed studies and biased experts.

Attorneys in those cases also used the media to create the widespread impression that breast implants were causing connective tissue disorders. The enormous negative media attention probably affected the ability of juries to make unbiased judgments.

In other cases, lawyers have manipulated the media by scripting news segments that support their cases. In one case, "Dateline" reporters who had been unable to get an automobile gas tank to explode rigged an explosive device to make it blow up for the camera.

The problem in dealing with litigation is that a strong legal system is critical for entrepreneurs to protect property rights. We don't want to kill the system, but we do need to fix it. Perhaps the place to start is to ask for data. No one knows how much litigation costs us, because lawyers are not required to report results. We should know how much money is flowing through legal offices, how much goes to lawyers, how much goes to plaintiffs and other costs to make good policy decisions.

The ability of America to continue creating business startups and jobs may depend on our finding a solution to this problem.