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.
