Constitutional Opinions
Winner Pays
Why our present system makes no sense.
Days after my septuagenarian father’s vehicle was struck side-on by an obviously crack-addled motorist, Dad was served papers informing him he was being sued. The plaintiff was none other than the automotively challenged crack-head, represented by a local law firm that seems to specialize in placing tacky billboards in impoverished areas of town that promise to “get your money!” The same plaintiff, who had neither liability insurance nor license, had been ticketed for a multitude of violations, including failure to yield right of way at a stop sign. He now claimed to have suffered a grab bag of injuries in the accident. He may have, but it was hard to see how my father was responsible for them.
Upon hearing the news, most of us had the same naive reaction: “He can’t do that! [“He” being the plaintiff.] He was at fault! He was ticketed!” But lawyers know he can do that. And what’s more, they wholeheartedly support his right to do so.
In the U.S. you can sue anyone for pretty much anything, even for looking at you crossways. There is little incentive not to. It doesn’t mean you will win, but there is always the chance you may. Many litigants seem to regard the court system as they do the state lottery. You may not get lucky this time, but eventually you will, and when you do you’ll be set for life.
This is because the U.S. — unlike nearly every other industrialized nation — does not have a loser-pays rule for lawsuits. Typically, loser-pays demands that if I sue you and lose, I have to pay your attorney fees. A loser-pays rule would have prevented travesties of justice like the one that befell a Washington, D.C. family dry cleaner recently dragged through two years of litigation by a customer seeking $54 million for a lost pair of pants. To date, the cleaning business’s legal costs have totaled $100,000. Not surprisingly, the plaintiff who brought this absurd lawsuit was a D.C. judge.
LOSER-PAYS RULES have been around since Homo sapiens decided to settle disputes not with stone axes, but with lawyers (ah, for the good old days). Yet all attempts to introduce reform have been stonewalled. The GOP floated the idea of losers-pay back in the early 1990s in the Contract with America, and when a U.S. News & World Report poll asked, “If someone sues you and you win the case, should he pay your legal costs?” a whopping 85 percent surveyed said yes. But the organized bar was steadfastly against the reform so the idea stalled. Leading the opposition were the influential plaintiffs lawyers and the American Bar Association. The ABA called loser-pays an “attack on access to the courthouse,” and a “tax on the right to litigate.” Together they have compiled an ominously long list of reasons why loser-pays is bad for all concerned, a list long ago addressed by European courts. (Ironically, the court system is the one area where Europhiliac liberals do not feel the U.S. should emulate Europe.)
Topping the list is the fear that loser-pays rules will bar the courthouse door for middle-class litigants who, say, want to sue McDonald’s when the former dribbles hot apple pie filling down his or her leg. (Note that half of lawsuits against businesses are filed against small businesses, which can ill afford the thousands of dollars to defend themselves against often frivolous lawsuits filed by disgruntled employees.) Europeans long ago solved this issue by offering litigation insurance, commonly offered as part of your automobile insurance package. But even if you choose to be uninsured and sustain injuries when some crack-head smashes into your SUV, you can still purchase “after-the-event” legal expenses insurance, which protects you in the event Sue Easy, Esq. flubs your case.
“Both types of litigation insurance protect the viability of strong cases while deterring weak claims through the underwriting process,” writes Manhattan Institute senior fellow Marie Gryphon in a report released this month. “Insurance can spread the risk of losing a good case across many such claims affordability, while poor cases are uninsurable.”
Another concern is that boutique law firms will drive up costs, but in Europe posh firms have to justify every cent, and losers only have to pay the winners’ “reasonable” attorney fees.
The benefits of a loser-pays system will be courts that are less clogged with nuisance lawsuits, litigants who are guaranteed speedier trials, and the withering of the litigatious, speculative mindset that has for decades plagued our courts, and, perhaps best of all, fewer lawyers. It is easy to see why the organized bar objects.
About the Author
Christopher Orlet writes from St. Louis.
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Christopher Kelleher| 12.18.08 @ 6:43AM
This is a lawyer's response. Before we adopt radical change, why not rely on the professionalism of those trained in the law to refuse cases without merit and ...... sorry, I just burst out laughing and sprayed coffee all over my screen.
Marc Jeric| 12.18.08 @ 10:55AM
All developed coutries in the world have the rule in law that says "the loser pays". For example Japan has some 10,000 lawyers, Germany 15,000, Great Britain about 8,000 - and USA 1,100,000. They are bloodsuckers destroying our businesses and costing the health industry some 100 billion dollars a year in medical malpractice insurance and unnecessary medical testing. You visit your doctor complaining about a pain in your elbow, and he sends you to a lab for a battery of 24 tests - he has to, otherwise he will be sued for not discovering a possible lung cancer. High time for us to join the civilized world - but small chance since 99% of our lawmakers are lawyers!
Scott Arnoult| 12.18.08 @ 11:25AM
The United States is a nation of laws, not men. In the military, you swear an oathe to support and defend the constitution of the united states, not an oath of loyalty to a leader or the fatherland. Lawyers take an other to support and defend the constitution of the united states and the state they are licensed in. We have alot of lawyers here because as a nation we value the law and the right of everyone to have access to the courts. All the large companies that are currently at the bailout buffet would without a doubt be willing to switch to a loser pays system--they would never get sued by the people who are going to get the bill for their bailout. Lawsuits and the threat of lawsuits cause the bailout businesses to treat people more fairly. The other countries do not care for the individual anymore, so they do not need lawyers to fight for the regular folks. Switching to a loser pays will just be one more move closer to a country already on the path to being ruled by an unaccountable elite. I will gladly argue with anyone who believes Germany, Japan and England have a greater commitment to the rule of law than the United States. (International law doesn't count)
L. Ross| 12.18.08 @ 12:11PM
Scott Arnoult:
With all due respect, sir, you are an idiot.
Bob The Sound Engineer| 12.18.08 @ 12:25PM
"The United States is a nation of flaws, not men."
I swear I looked at that three times and thought that's what it said. And it made perfect sense.
Scott Arnoult| 12.18.08 @ 1:31PM
Nice argument, L. Ross-- do not address the points someone makes, just call them idiots. With respect to the article, There is a case mentioned which involves a crack addled motorist who appears to be clearly negligent in the situation given the facts included in the article. The problem with a crack-head, is that they do not have any assets to recover if you sue them. Our system already provides a remedy to the innocent motorist. In most states, he can sue the crack-head and the lawyer foolish enough to bring the frivolous action on behalf of the crack head in the article's example. The innocent motorist can recover attorney fees and other damages. The crack-head may not have any assets, but the lawyer will have insurance. Lawyers and their client are both liable for abusing the legal process. Also, the example of a crack-head is not a very good personal injury case to use in a loser pays argument. Typically, lawyers take personal injury cases on a contingency basis. If the do not win, they do not get paid. Filing a lawsuit costs money. Personal injury lawyers cannot waste to much time and money on crack-heads who run into other vehicles or they will not be able to pay their own bills. How would the loser pays work in other types of cases? In divorce cases, who would pay? What about someone getting sued by the government or charged with a crime? Do they have to pay all the government lawyers and prosecutors who have infinite resources to begin with?
The Deuce| 12.18.08 @ 2:01PM
Scott Arnoult:
The United States is a nation of laws, not men.
We're a nation of both laws and men. And both of them are being grossly abused by lawyers.
Lawyers take an [oath] to support and defend the constitution of the united states and the state they are licensed in.
What's your point? What they do and what they swear to do are two different things.
We have alot of lawyers here because as a nation we value the law and the right of everyone to have access to the courts.
Oh, that's why. And here I thought we had so many lawyers because lawyers can make obscene amounts of money, without having to contribute anything to the public good like doctors or entrepreneurs do, and often even at the public's expense.
All the large companies that are currently at the bailout buffet would without a doubt be willing to switch to a loser pays system--they would never get sued by the people who are going to get the bill for their bailout.
First of all, evidence please.
Second of all, what a bunch of bullshit. If the bailout companies have genuinely wronged people, why would they want "loser pays"? It means that they would have to pay those people's litigation fees when they lose to them.
If they haven't wronged people, then why should it be easy for people to sue them? Why should they have to pay money, even if it turns out that they didn't do anything wrong?
Lawsuits and the threat of lawsuits cause the bailout businesses to treat people more fairly.
Again, evidence please? We can show you lots of evidence that the current system causes people to treat small-business owners unfairly, often wiping them out and stealing their livelihood even when they haven't done anything wrong.
The other countries do not care for the individual anymore, so they do not need lawyers to fight for the regular folks.
You mean regular folks like the ones contributing to society by running small businesses, who are unjustly accused by some litigious schmuck and his selfish leech lawyer, and then have their lives ruined even though they're found innocent?
Since when does "caring for the individual" mean promoting the individual's ability to sue whoever he wants, whenever he wants, for whatever reason he wants, at absolutely no risk to himself, and to ruin the defendant even if he loses? What about "caring for the individuals" who get sued?
Like L. Ross said, you, sir, are an idiot.
The Deuce| 12.18.08 @ 2:06PM
"How would the loser pays work in other types of cases? In divorce cases, who would pay?"
If it's a divorce for infidelity or something, obviously the guilty party should pay. If it's a no-fault divorce, the person filing it should pay (both parties, if both are bringing the case).
"What about someone getting sued by the government or charged with a crime? Do they have to pay all the government lawyers and prosecutors who have infinite resources to begin with?"
Um, yeah. If someone is charged with a crime and found guilty, that sounds pretty fair to me. If they're innocent, they don't have to pay anything. That also sounds fair to me.
The Deuce| 12.18.08 @ 2:11PM
Btw, Arnoult, I think it's funny how you're acting as if divorce and federal crimes are somehow impossible difficulties for a non-loser-pays system (though, as I showed above, the answers are pretty simple and obvious).
Every other developed nation in the world has loser-pays, and yet, somehow, they still have divorce and federal crimes. Man, how'd they ever figure out how to make it work? They must be freaking geniuses!
L. Ross| 12.18.08 @ 2:28PM
Scott Arnoult:
Dude, don't take things so seriously. I was trying to be funny.
Regarding you comment on Japan, Germany, and England having respect for the rule of law, I do disagree with you. As a military member, I have spent a few years overseas. I have stayed for weeks or months at a time in all the countries you mentioned, as well as some of the more "aromatic" countries of the world.
The two biggest differences between first world countries and 2nd/3rd world countries are 1: infrastructure (roads, bridges, power grids, etc.) and 2: respect for the rule of law.
When people don't trust that the law will be applied fairly and equally in all situations, they restrict their mobility for fear of harrassment by police looking for bribes, and restrict their trade, for fear of local officials looking for bribes. What is the difference between Arizona and Mexico? They share a similar climate (way to hot, way to dry), are right next door, but Arizona has infrastructure and a rule of law. Because of this, you can live a decent life in Arizona.
You can also live a decent life in Japan, Germany, and Great Britan, three very different cultures in two different hemispheres.
You also state that "Lawyers and their client are both liable for abusing the legal process." If that were true - enforced - do you really think this case, or the thousands and thousands like it would ever be accepted? There is a speed limit on the freeway here in L.A. It's 55mph. When it's not rush hour I dare you to try to stay on the road at 55. Everyone is doing 80. The point is a law that isn't enforced isn't much of a law.
There is some merit to your point on government lawsuits. However, the government as a unique entitity and could easily be exempted from this regulation, or perhaps we could invert it. If the government sues you and you loose, you'r not liable for the cost of the government's expenses. If the government sues you and you win, the government is liable for the cost of your expenses. That would reduce the government's desire the pursue reckless lawsuits, leading to greater freedom for all citizens.
Finally, if you can look at the statistic Marc Jeric put up, regarding lawyers in the U.S., Great Britain, Japan, and Germany, and not decide that something is seriously out of whack here in the United States, than once again, I respectfully submit, that you, sir, are an idiot.
2Guns| 12.18.08 @ 3:04PM
Loser pays may also get rid of the SLAP lawsuits, were people feel forced do things that they don't want to do because there is fear of a lawsuit. Even if you're in the right, you are still stuck with your legal fees. Loser pays may get the ACLU to stop getting its way by mearly threating a lawsuit
dgdc| 12.18.08 @ 3:11PM
I was riding my bicycle along a bike path a few weeks ago and was struck by an incompetent old motorist. The insurance company refused to pay and doing the calculus I figured the expense and hassle would not be worth the possible recovery.
If you double cost of losing than yes that makes plaintiffs less likely to proceed. I survived with a busted bike and a broken bone, but this guy has had no consequences and will likely kill his next victim.
Scott Arnoult| 12.18.08 @ 3:29PM
L. Ross--thank you for your service to our country. I think loser pays systems will encourage companies to file strategic lawsuits to avoid public particpation. There is more than one way to win a lawsuit than just on the merits. If you want to get rid of the small business or non-rich individual with SLAP, you just keep burying them in paper until they cannot fight anymore than you come after them for legal fees.I still think we have the best constitution and legal system in the world. Loser pays system favors the repeat players-- insurance companies, big business. If you go to court all the time, you can take on more risk of paying the other guy's fees. If you are a small business or individual like dgdc, you will not be in court very many times, but when you are it will be worse on you to pay the other guys fees than it is to the repeat players you will be up against. Maybe instead of loser pays, how about getting rid of some law schools if the issue is too many attorneys?
L. Ross| 12.18.08 @ 4:13PM
Scott Arnoult:
Decreasing the surplus population of attorneys in the U.S.? That's not humbug! That is something to stand up and cheer about!
We really need to start sending our brightest kids back into engineering careers which pay well, and have a positive effect on the nation, instead of lawyerin', which mostly just benefits lawyers.
JT OConnor | 12.18.08 @ 9:49PM
Mr Orlet's article brings to mind the old (and outdated) joke. Why are there no c0mmemorative stamps honoring lawyers? People don't know which side to spit on.
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