

Loser-Pays makes lawsuits fairer in Europe. It could work here, too. - mhb
http://reason.com/archives/1995/06/01/civil-suits/#

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bradleyland
"The practical case for loser-pays is equally compelling. Litigants naturally
think too well of their cases; loser-pays pushes them to size up their
prospects more realistically. It also curbs the brand of extortion, so routine
in American law as almost to have lost its ethical taint, by which lawyers use
the costs of the process itself, or the risk of a fluke outcome found in any
trial, to strong-arm their opponents into settlement."

I'm facing this very scenario right now. We're being sued by a lawyer who is
working on contingency for a client who is so delusional it makes me sick to
my stomach to think about it. The really ugly side of this is that lawyers of
the ilk that are suing us find specific loopholes through which they can (or
attempt to) attach you personally, even if you're incorporated. We're being
strong-armed to settle, and will likely pay these jerks something, just to
have it go away.

If "loser-pays" applied here, this lawsuit would have been wrapped up after
the very first round of inquiry.

~~~
vannevar
While 'loser pays' might benefit your particular case, it's easy to imagine an
equal number of scenarios where a guilty corporate defendant uses the threat
of running up huge legal fees to discourage valid lawsuits against it. The
result is a windfall for corporations with no net improvement in actual
justice. To put it another way, it decreases the likelihood of frivolous
plaintiffs but increases the likelihood of frivolous defendants.

~~~
Havoc
>To put it another way, it decreases the likelihood of frivolous plaintiffs
but increases the likelihood of frivolous defendants.

An acceptable trade-off in my view. The defendant is by definition not the one
starting the court case so its more difficult to abuse. e.g. I can go onto the
street & hit 10 guys with a baseball bat. Compare that with waiting on the
street to get punched in the face (unlikely to happen) & then hitting them
back with a baseball bat. Both involve the possibility of someone getting hit
with a baseball bat but the one is less likely to happen & more difficult to
abuse.

~~~
vannevar
If a corporation operates a big oil platform in a reckless manner and causes
billions in damages, who is "starting the court case?" Corporations are far
more likely than individuals to cause widespread harm, and they're also far
more likely to use a cost/benefit analysis rather than morality to guide their
decision-making. After all, contrary to the what the law says they're not
people---individual responsibility is too dissipated in a big corporation for
individual morality to influence behavior.

~~~
Havoc
Such a corporation as you describe will act that way (recklessly) regardless
of whether its loser pays or not. Besides, its unreasonable to expect such a
mechanism (loser pays) to catch cases involving billions in damage & unethical
corporations. i.e. Just because there are cases that loser pays will not
prevent doesn't mean loser pays is a bad idea.

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zacharypinter
Not so sure about this:

"It also curbs the brand of extortion, so routine in American law as almost to
have lost its ethical taint, by which lawyers use the costs of the process
itself, or the risk of a fluke outcome found in any trial, to strong-arm their
opponents into settlement."

There was a great interview on SGU with Simon Singh, the British writer who
was sued for libel by the British Chiropractic Association. He talks about how
they kept on inflating their costs during the lawsuit to try to force his
hand, knowing that he'd have to pay an exorbitant amount if he lost.

Relevant links:

[http://www.theskepticsguide.org/archive/podcastinfo.aspx?mid...](http://www.theskepticsguide.org/archive/podcastinfo.aspx?mid=1&pid=271)

<http://en.wikipedia.org/wiki/Simon_Singh>

~~~
vessenes
Libel laws are extremely strong in the UK; the closes thing we have here would
be anti-trust laws.

As a fun historical example, Richard Branson felt BA was acting
monopolistically in England; they both kept Virgin out of Heathrow for some
time, and one of their senior execs badmouthed the airline in England.

Virgin took the court to New York State (since, you know, JFK Airport), won
the anti-trust case there, then returned and won the libel case in the UK
based on evidence in the US case. At least, that's how Branson tells it.

------
ScottBurson
I just found this comment from Walter Bright on a previous thread on this
topic. I think it's brilliant:

 _Loser pays can work when the amount the loser is liable for is the minimum
of his legal fees or his opponent's legal fees. That puts the maximum he is
liable for under his own control._

I _love_ this idea, as it completely prevents the scenario where a well-
financed plaintiff uses the most expensive lawyers and runs up a huge bill,
just to add to the defendant's risk and encourage a premature settlement.
Under this rule, if you want to spend a bunch of money on good lawyers to
improve your chances of winning the case at all, go ahead, but you won't
collect more in fees by doing it, unless your opponent does the same (as they
presumably will if they can afford to).

~~~
vannevar
This is an appealing idea at first glance, but it really doesn't accomplish
anything for plaintiffs represented on contigency. They get charged nothing if
you take the rule literally, and if you use the plaintiff's attorney's costs
they could often be as high as the defense costs. The rule still punishes
indigent plaintiffs who bring lawsuits in good faith to litigate genuine
disputes.

~~~
leot
I think powerful plaintiffs frivolously suing indigent ones is far more common
than the other way around, and a much bigger problem. Without some kind of
loser-pays it's always possible for wealthier individuals to sue poorer ones
and win a war of attrition.

~~~
vannevar
Artful trolling. Well played...

------
dminor
Extensive discussion last time this was posted:
<http://news.ycombinator.com/item?id=1792353>

------
tzs
Comparison between the US and Europe in this area is close to meaningless,
because of fundamental differences in how the two tend to view the roles of
the judicial and executive branches of government in the enforcement of laws.

The US has a greater tendency, particularly in the areas of civil rights but
also torts in general, of structuring the law so it gives the injured party a
private right of action, which they enforce in courts, and leaving the
executive out of it.

Europe has a greater tendency in these areas to have the executive branch deal
with enforcement.

~~~
Derbasti
So you are saying the US gives even more power to the powerful and wealthy
(e.g. corporations) and even less power to the poor regardless of who is
_right_. One might argue that a court should exist for deciding about justice,
not budget.

------
B_
Look at who pays the bills at Reason. That's who would benefit from any policy
recommendations they have. "Fair" has nothing to do with it.

If you want to make it "fair" then reform the rules to where no party to a
case can spend more than the other. If I bet my friend that I and a friend
could beat him and a friend a two-on-two basketball, and he shows up with Kobe
Bryant, would that be fair? What if that bet stated that the loser pays the
bills for dinner at the winner's choice of restaurant? Is that fair? Yes, it
would be a stupid bet to make. But the proposed policy change makes that bet
no longer a choice but a matter of law.

~~~
kalleboo
Quoth the article: «A common fear about loser-pays is that the side who loses
a routine dispute will get handed a bill for 10,000 hours from Cravath, Swaine
& Moore. But European courts are well aware of the danger that successful
litigants will overinvest in their cases and gold-plate their fee requests.
They carefully control the process to prevent that danger, giving the losing
side a full chance to dispute a fee award, requiring that work be reasonable
and necessary, providing that elite lawyer rates not be paid if a Main Street
lawyer could have done the job, and so forth.»

~~~
vannevar
_They carefully control the process..._

Meaning they heavily regulate what can be charged. Why is Reason so
enthusiastic about regulating attorneys but screams bloody murder if the
government tries to regulate doctors or the energy industry?

------
yason
Compared to the US, loser-pays would also cut cown the number of lawsuits
because plaintiffs would think twice or thrice before suing. That would
definitely be a good thing: a court is an awfully frictional and expensive way
to settle disputes and should rightly be reserved to the most pressing ones
that seem to warrant the corresponding financial investments. Anything that
can be settled outside of courts should be.

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joejohnson
It seems like the real impetus for this kind of law (in the US) is that
lawyers would oppose it. The article touches upon this at the very end.

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iwwr
Let's not forget that legal fees are not entirely the fault of the litigants.
The burden of laws and rules is so great, you need expensive experts to
navigate it. The weight of the laws themselves is promoting abuse and
injustice.

Consider the analogy of a number of prisoners being forced to walk through a
different minefield each day. Even if they are given a map to memorize the
night before, it does not make the event fair.

------
MaxGabriel
This title could use a [1995] tag

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dholowiski
Loser pays in Canada too. There's way less lawsuits but even if your in the
right you might not sue, simply because you can't afford to lose.

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anamax
Does Europe have punitive damages? Who gets them?

The US does and they go to the winning plaintiff, which is sort of odd. After
all, if someone is fined for assulting me, I don't get that money.

~~~
thirdusername
Sweden (and by extension probably all of Scandinavia) doesn't do punitive or
exemplary damages.

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Havoc
I find it bewildering that anything else is in use anyway.

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blue1
in Italy the judge decides who has to pay the costs. Loser pays everything
only if he loses badly, so to say.

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itswindy
Problem with it that even if you are right, you'll think twice about suing, so
it works both ways.

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davidw
Pretty much everything I've ever seen from "reason.com" is material promoting
a libertarian viewpoint. Not that there's anything wrong with that, but it's
pretty much just politics.

~~~
vannevar
"Loser pays" doesn't seem consistent with libertarian philosophy, in that it
advocates government interference in what should be a private economic matter:
how one pays for one's legal representation. It _is_ consistent with
corporatism, however, which I suspect is closer to Reason's true philosophy.

~~~
lawnchair_larry
I've noticed that in most of the US, "Libertarian" means the opposite of what
it does elsewhere. Aside from the Tea Party 2.0-esque "libertarians", most
libertarian philosophy is consistent with preventing private corporations from
being bullies.

It's a bit counter-intuitive, until you consider that there is no freedom if
the rich man makes the rules.

