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January 20, 2007
Sore, important subject: "Loser Pays"
There's an interesting collection of periodic posts (pro and con) over at Point of Law on adoption of a UK-type "loser pays" scheme in American courts: a touchy if not just plain raw subject with constitutional colors. The loser-pays issue in the U.S.--it balances the right to access to courts against the need to deter wasteful/shoddy litigation--routinely jangles nerves and triggers serious fights over which inefficencies a democracy should and shouldn't accomodate. But loser-pays schemes merit discussion in America by lawyers, judges, academics and pols of all political persuasions in the interest of (1) clients and (2) good lawyering. It's not merely a pet issue of the right. Y'all game to at least talk about it?
Posted by JD Hull at January 20, 2007 04:00 PM
Comments
JD, your being the good corporate type, I am not surprised that your support loser pays, but it is a horrible idea for three reasons.
One--today, corporations can deduct the cost of defense so the government is already paying over 40% of the cost of defense in any state that has a state corporate income tax. To be fair, you would have to end this deduction, as well as the deduction of fees paid by the loser.
Second, corporations can buy insurance to spread the risk of defense costs and loser pays--presumably, if you lose a case your insurer will pay the defense cost, but plaintiffs cannot buy insurance to spread the risk
Third, no plaintiff would ever bring a case, given the risk and bias in the system. Take the simple example of parents of a minor who is injured in a car collision due do a product defect in the vehicle in which the child was a passenger. Even if 75% of the time the verdict will be for the plaintiffs, who could take the risk as a plaintiff of losing?
Posted by: Moe Levine at January 17, 2007 06:25 AM
Moe--All your reasons are good ones. But if the loser pays scheme worked, and discouraged hugely expensive junk suits to a measurable degree, couldn't the efficiencies be passed on to consumers at all levels in prices on everything from business insurance to household products and to workers in their comp packages?
Posted by: Dan Hull at January 18, 2007 05:24 PM