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The politics of loser-pays



From Columbia lawprof William H. Simon's "The Prudent Jurist" column in Legal Affairs:

The "loser pays" rule would accomplish what current reforms are striving for: It would encourage plaintiffs' lawyers to bring fewer claims that have low probabilities of success. Unlike some current reforms, however, fee-shifting would work without inhibiting claims that have a high likelihood of winning.

Unfortunately, "loser pays" does not appeal to any of the groups most active in the tort reform debate. Plaintiffs' lawyers dislike it because it would force them to bear defense costs they can now impose on their opponents when they lose. Industry groups dislike it because, while it reduces "frivolous" claims, it invites a new category of lawsuit´┐Żsmall claims with a high probability of success that are discouraged under the current system because of the expense of bringing them. If losing defendants had to reimburse successful plaintiffs for litigation expenses, these claims would become viable. From the point of view of fairness, this seems a gain, but its prospective cost dampens business enthusiasm for the measure.

 

 


Rafael Mangual
Project Manager,
Legal Policy
rmangual@manhattan-institute.org

Katherine Lazarski
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.