December 2, 2008

The Manhattan Institute Center for Legal Policy today released a report by senior fellow Marie Gryphon, Greater Justice, Lower Cost: How a "Loser Pays" Rule Would Improve the American Legal System. The report concludes:

The United States pays a high price for a system of justice that uniquely encourages abusive litigation, but it need not continue to do so. Thoughtful reforms in state and federal law can bring our civil justice system into sync with the rest of the world by replacing the American rule for attorneys' fees with a loser-pays system. Loser pays need not close the courthouse door to plaintiffs with modest means but legitimate grievances. England's recent quasi-privatization of civil justice demonstrates that markets for litigation insurance can develop rapidly in response to legal reforms, and that reasonable limits to the parties' exposure to liability for fees, if they are incorporated into an offer-of-judgment mechanism, can promote early settlement.