Relatively obscure in the United States, this form of insurance is well established in the major loser-pays jurisdictions, where it typically (among other functions) helps protect individuals against the risk of owing a fee as a losing plaintiff at trial. That it (like other forms of insurance) might not be immune to gamesmanship and angle-playing, however, is suggested in this post from the popular U.K. fictional law blog, Baby Barista.
The tension between the interests of relatively strong and relatively weak claimants -- which helps to stretch legal ethics to the breaking point in the Vioxx settlement -- would be more manageable if we adopted the sensible incentives of loser-pays. Thus argues PoL's own Marie Gryphon in this new piece at City Journal.
Now for something a little different, an "experimental economics" paper by Kevin McCabe and Laura Inglis from GMU's Mercatus Center:
This paper provides an overview of the tort process and introduces a scientific approach for evaluating tort reform proposals. In this paper, we describe an experiment that models the tort process and attempts to identify factors that promote pre-trial settlements. Results of the experiment indicate that promoting pre-trial settlements would benefit both plaintiffs and defendants, because money spent on costly litigation could be used to compensate tort victims and that speedy resolutions would give injured parties quicker access to the funds they need.
Continue reading "Using Neuroeconomics Experiments to Study Tort Reform"
Not clear at all whether there's a trend -- and the legal system is set up to make it extremely hard for doctors to prevail in countersuits -- but the AMA's American Medical News notes that three Ohio doctors have succeeded in getting their legal fees paid by adversaries over the past six months, along with a similar such case in Mississippi. The real pattern to be discerned, if there is one, may be that the Ohio State Medical Association assisted in all three of the wins in its state "through its Frivolous Lawsuit Committee, a program that educates physicians about the practice and helps them defend against it". More: White Coat Rants.
The publication notes that fee shifts could pose a significant deterrent to the record industry's litigation onslaught against file-sharers: "Defendants with strong cases may be more willing to go to trial and to stand up to the RIAA if they believe they will recover their legal fees."
As many readers of this site already know, the state of Alaska has enjoyed the benefits of a loser-pays principle in its civil litigation since territorial days. The speaker of the Alaska House, Rep. John Harris (R-Valdez), discusses the re-strengthening of the rule (following a partial watering down) in a recent opinion piece reprinted as our newest featured column.
Anthony Sebok's Findlaw column on the Pearson pants suit cites Overlawyered and repeats two points regular readers of Overlawyered and Point of Law have seen before:
Yet Sebok concludes that there is no epidemic of fraudulent litigation. I suppose it depends on one's definition of "epidemic" and "fraudulent"; as we've noted before, Bill Lerach successfully swiped several billion dollars in nuisance settlements bringing meritless Enron litigation, helped by an erroneous district-court class certification. (Such erroneous class certifications helped make Madison County a judicial hellhole.) Sebok acknowledges that "lawyer-driven" cases where plaintiffs act as their own attorneys might merit loser-pays rules to deter meritless lawsuits that would be cheaper to settle than fight, but what makes most class-action litigation any less "lawyer-driven" such that they should be subject to different rules?
In today's Wall Street Journal:
The case offers two enduring lessons. The first is that those who think about suing for libel should think again before doing so. And then again once more. While all the ultimate consequences to the Islamic Society for bringing the lawsuit remain uncertain, any adverse consequences could have been avoided by not suing in the first place.
The second lesson is that in one way (and perhaps no other) we should learn from the English system and award counsel fees to the winning side in cases like this, which are brought to inhibit speech on matters of serious public import. Because all the defendants in this case were steadfast and refused to settle, they were eventually vindicated. But the real way to avoid meritless cases such as this is to have a body of law that makes clear that plaintiffs who bring them will be held financially responsible for doing so.
In Overlawyered: May 30; May 17.