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Why the USA badly needs a ‘loser pays’ legal system

It is no secret I am no great admirer of some aspects of the US legal system and the corrupting influence of the US trial lawyers lobby, but then along comes a particularly stark example of why the US really really really needs a UK style ‘loser pays’ system to discourage preposterous actions like this

Man Blames Planes For Divorce, Seeks $555 Million [...] (Stanley) Hilton’s 16-page suit against San Francisco International Airport blames 37 organizations for the collapse of his marriage and seeks $15 million from each of them. Targets of the suit include the city and county of San Francisco, the airport and every airline based there, airline engine manufacturers and the real estate agencies involved in the sale of his house.

This is a clear indication of a legal system is in dire need of radical reform. I do not know if Stanley Hilton is in fact deranged, but any legal system which allows him to do what he is doing certainly is.

26 comments to Why the USA badly needs a ‘loser pays’ legal system

  • Nuke Gray

    But, if the wife was REALLY hot, he might be right! Let’s see a photo of his wife first, before deciding.

  • PersonFromPorlock

    Even with ‘loser pays’, there’s no guarantee an unscrupulous lawyer won’t inveigle a client into filing a lawsuit that will net the lawyer his fees regardless of the suit’s success.

    My suggestion for some time now has been a ‘loser’s lawyer pays’ system. After all, the lawyer is the one to know if a lawsuit’s likely to succeed. Under a LLP system, lawyers who file suits that fail will soon be reduced to writing wills and conveyances – and staying out of court – to keep the wolf from the door.

  • Even with ‘loser pays’, there’s no guarantee an unscrupulous lawyer won’t inveigle a client into filing a lawsuit that will net the lawyer his fees regardless of the suit’s success.

    Sure but I suspect it would reduce the number of speculative merit-less actions by 90%

  • lukas

    Don’t most states have a “frivolous suit” statute aimed at such cases? For example MRS 514.215:

    [...] if the court finds [...] that the cause was initiated [...] frivolously and in bad faith, the court shall require the party who initiated such cause [...] to pay the other party named in such action the amount of the costs attributable thereto and the reasonable expenses incurred by the party opposing such cause, [...] including reasonable attorney’s fees and compensation of said party for the time reasonably required of the party to oppose such cause [...].

    It won’t cover all cases, but it would certainly cover the one you cite, wouldn’t it?

  • MichaelV

    The problem with frivolous suit laws is that you actually have to spend time pursuing the charge of a frivolous suite. If you are the one being sued, that means not only fighting the suit, but then also paying your lawyer additional fees to turn around and sue back, and all the related time involved in that. Therefore, “fighting back” can cost just as much as fighting the original frivolous suit.

    In law (in the US anyway), you get as much justice as you can afford. Once the money runs out, you have to take what your lawyer was able to deliver.

    My concern with the “loser pays” system is based on that last statement. If I can only afford enough lawyer to protect my rights, but not enough to counter-sue and win me a judgment, do I get paid?

  • Loser Pays is unnecessary. American courts can already order sanctions for frivolous suits and wasting the court’s time, Rule 11 under the Federal Rules of Civil Procedure. Most states have similar provisions.

  • Tim P.

    @Joshua – You are correct in theory, but Rule 11 is so rarely invoked on either the Federal or State level that it barely merits mention.

    A more promising tact might be that this San Francisco fellow’s lawsuit is so over the top that he might do the near impossible – embarrass the California Bar, which could subject him to discipline for extreme frivolity.

  • Pault

    You need more than “loser pays” to stop the rot not only in the US but in all common law based legal systems.

    The areas of life governed by litigation has slowly increased over the years. The chief reason for this is activist judges who have slowly extended their powers to govern ever more areas of life. Many judges are at fault, but none more so than the former Master of the Rolls, Denning.

    There are a number of things that need to be carried out:

    1. Don’t appoint judges from practising lawyers. Judges so appointed have a pro-litigation bias and hence entertain idiotic law suits. Train judges separately and then appoint them for life. They should start at the Magistrates’ court and those with talent can rise up.

    2. Change fundamentally the rules of evidence to allow evidence to be controlled by judges rather than the lawyers. This will stop venal trial lawyers from playing games with the legal system and the judges. Various judicial inquiries are already run this way to a large extent, it should be extended to day to day court work.

    3. Change the pleadings system, so that it is much more based on written submissions rather than viva voce argument at trial. This way the judges can make many more decisions faster without wasting time in court while the lawyers play silly-buggers with the system.

    4. Legal reform to reduce the power of judges, including codifying many areas to roll back some areas of tort and the many areas of so-called “equity” that were slowly extended during the 20th century by activist judges who tried to legislate rather than leave it to those who were elected to legislate.

  • My concern with the “loser pays” system is based on that last statement. If I can only afford enough lawyer to protect my rights, but not enough to counter-sue and win me a judgment, do I get paid?

    You do not counter sue, you just have to not lose. It motivates people not to just settle even if they know they are in the right to avoid getting bankrupted.

  • lukas

    But Perry, I’m sure you know that you can lose a suit even if you’re in the right. And then you’re doubly fecked.

    If you know you are right, but you think you only have an 80% chance to win a suit, won’t “loser pays” rules encourage you to settle just as much?

    Moreover, if paying for one’s own defense isn’t a sufficient deterrent to frivolous lawsuits, what makes you think having to pay for both sides would change much?

  • RRS

    Two points:

    Much worse than the case of civil litigation is the issue of cost of defense in prosecutions.

    That destructive cost is used as (not just a tool or ploy) a litteral weapon to bludgeon people into capitulation rather than trial, and surrender the possibility of exoneration. A recent spate of better jurists has been blunting some of that, but not significantly over all.

    In this first case, we have to face the fact that the greatest treat to individual freedom in the U.S. lies in prosecutorial abuse. It will, in time, and progressively, erode, degrade and possibly destroy civil compliance and “law abidence.”

    Next, we have to face the fact that the U.S. legal system, like any other “operating system” develops functions to serve its users. As those functions adapt to the users’ desires, the staffing of the operators (primarily lawyers) is also adapted.

    While historically litigious (see, de Tocqueville), the objectives of the U.S. populace has moved steadily toward shifting the use of the legal system from resolving disputes and fixing responsibilities (tort law) to a system for achieving objectives, such as: repairing harm, regardless of responsibility (tort law); implementing changes in societal relations; and a host of other matters. In short, the sytem is regarded today as an instrumentality to “get things done.”

    As a result, like the evolution of railroads. Once the engineers have built the tracks, bridges and equipment, the next set of engineers are “operators.”
    Which is an observable analogy to many (though not all) entering the practice today.

    The trends appear to have begun shortly before WW I, perhaps as a corollary to the “Progressive Movement” and have continued in”waves” which have been recognized (and fomented?) by the Yale Law faculties in particular for many decades now.

    Much of these latter trends can be discerned in the explosion of statute law, and the now dominant load of statutory cases in the legal system in both the rise of administrative law forums and the court venues which are the major parts (but not all) of our legal system.

  • RRS

    I guess I left out:

    The U.S. legal system is the result of what its people seem to want, or think they want, or have been convinced they should have.

  • Laird

    I’m not opposed to “loser pays”, but the real problem is judges who won’t dismiss frivolous lawsuits. They already have that power under Rule 11, as has been previously noted, and an erroneous dismissal could always be reversed on appeal if necessary; it’s just that they won’t do it. And yes, being sued does entail some costs for hiring an attorney, but filing a motion to dismiss is relatively inexpensive as it is done prior to filing a formal Answer or entering into the discovery phase. Judges need to become more assertive in throwing out meritless suits, such as the one cited in Perry’s article.

    Pault’s ideas are pretty good, too.

    Incidentally, Tim P, the linked article mentions that the plaintiff in this case has already been disbarred in California, for “moral turpitude”. That merely prevents him from representing others, however; he can (and obviously does) represent himself in pro se actions.

  • Pault

    Have a look at this book and web site by Evan Whitton who has identified many problems with the current legal system:

    http://www.abetterlegalsystem.info/

  • Moreover, if paying for one’s own defense isn’t a sufficient deterrent to frivolous lawsuits, what makes you think having to pay for both sides would change much?

    I wonder of this Stanley Hilton joker would have done this if he faced paying the legal costs of all 37 of the organisations he is suing.

  • lukas

    37 identical motions to dismiss? Can’t be that expensive, methinks.

  • the other rob

    lukas – 37 different sets of lawyers, one per defendant, all insisting that they must each draft their own “specially crafted” motion to dismiss… The costs mount up.

  • Paul Marks

    Cases that have no real basis are one of the reasons (along with the regulations and the subsidies) that American health cover is so expensive.

    And making the loser pay would make someone think hard about “do I really have a case”.

    There would also have been a recent political effect – Sarah Palin was forced from the Governship of Alaska (and she was a good Governor) by endless law suits.

    Each case was nonsense – but the judges allowed them (see how judges in Alaska are picked – it is not how you might think) and Palin had to pay her own costs (costs for winning). And there was the TIME taken up by case, after case, after case.

    More generally the excuse given for American tort law is as follows.

    “It is the alternative to having government regulation”.

    Fine – accept that it is NOT.

    There are hundreds of thousands of pages of local, State and Federal regulations.

    Messed up tort law is not an alternative to the massive government regulations – it is ON TOP OF IT.

  • Sunfish

    2. Change fundamentally the rules of evidence to allow evidence to be controlled by judges rather than the lawyers. This will stop venal trial lawyers from playing games with the legal system and the judges. Various judicial inquiries are already run this way to a large extent, it should be extended to day to day court work.

    What is this, in English?

  • Nuke Gray

    I sometimes think that we should have public lawyer stations, like police stations, funded by the public, where any member of the public could enquire about their constitutional and legal rights. If you also wanted to hire or consult with a private lawyer, this would cost you directly.
    Why not treat lawyers like we treat police? As a public service? At least until the Great Libertarian Revolution?

  • the other rob

    Sunfish – it reads to me like a switch from adversarial to inquisitorial justice.

  • lukas

    the other rob,

    Why should the legal system account for the inability of defendants to coordinate? Anyway, since this suit is clearly frivolous, this nut may have to pick up defendants’ legal bills after all (if he has any money left in the bank, which he might not, being disbarred and divorced).

    In a properly functioning legal system, a motion to dismiss shouldn’t even be required here.

  • Sunfish

    The Other Rob-

    Could you dumb that down to room-temperature-IQ illiterate-yank-cop talk? Because I still have no idea what he meant.

  • the other rob

    Sunfish

    In the adversarial system (which is used in Anglosphere, certain ex commonwealth countries etc and is descended from English common law) both sides assemble their evidence then have it out in court, with the judge as referee (and, sometimes, also trier of fact).

    In the inquisitorial system (France, much of the EUSSR, descended from the Napoleonic Code) all evidence is in the dossier, which is assembled prior to trial by or under the direction of an “examining judge” or public prosecutor.

    Pault’s suggestions seemed, to me, to imply a fundamental shift from the former system to the latter.

  • Hah, since when has it been illegal to ruin someone else’s marriage? If anything, at least in the West everyone has a right to ruin any marriage they wish, provided they don’t commit crimes emwhile wrecking marriages.

  • “Why the USA badly needs a ‘loser pays’ legal system.”

    Absolutely the US should not have a “loser pays” legal system. It would prevent far too many people from pursuing plausible but not slam dunk lawsuits, regardless of their resources–unless the are very rich.

    What we should have, with the power to be vested in a jury, is a separate and needs be unanimous judgement and subject to judicial review, that the losing attorney pays.