Loser Pays


New at Reason: Ron Bailey takes on his critics in Round Two of the debate over limiting plaintiffs' financial settlements.

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  1. Limits on lawyer fees are not interference in the right of free contract, because courts are not markets. Interesting.

    One could make a similar case for campaign finance regulations not as a regulation on CONTRIBUTORS, but as a condition of ballot access for the CANDIDATES. In other words, a ballot is not a market.

    I’m not sure I’d find such a case convincing, but it’s an interesting line of argument.

  2. This is the most obvious sort of rent-seeking by people who have been on the losing end of legal battles,and,predictably,run to the State to hobble their opponents.The “Common Good” group you touted in your last piece,Mr. Bailey,seems to be comprised mainly of members of one giant D.C. law firm,with a sprinkling of frankly past-it politicos for cover.I don’t see any of them volunteering to cut their fees,and they get paid when they lose.Your proposal amounts to nothing more than a subsidy to incompetent lawyers who have not kept up with the times,and as I’ve said before,the likelihood of the mediocrities in most state legislatures outfoxing the smarter lawyers is much smaller than you might think.

  3. I must say I’m impressed with Reason’s commitment to a broad range of things called “libertarianism”. In Mr. Bailey’s case, it seems to boil down to the following:

    1. Laws and regulations do nothing but harm to companies and their principals. Everything should boil down to enforceable contracts and respect for property rights and human life. Laws that get in the way of this should go away, post haste
    2. When you let the peasantry enforce their side of a contract and defend their rights and lives, it’s not fair because peasants never had anything of consequence to begin with.
    3. We need lots of laws and regulations aimed at the peasantry, in order to prevent them from going after their betters (or their health insurance company or the guys whose company dumped mercury into the local aquifer, as the case may be) in any meaningful way.
  4. Matt: You are bang on about the punitive damages and the fiction that is “emotional distress”. But I still think the idea of “loser pays” has merit. It is my belief it would eliminate a lot of the nonsense suits that seem to abound in the U.S. court system, and seem to be creeping North of the border as well.

  5. “Again,why are the fees paid by strangers to lawyers any of his business in the first place?”

    perhaps you forget that Mr. Bailey, a professional writer, is obliged to express opinions on subjects which do nto directly concern him by the very natrue of his profession.

    but why are clumns written about things that don’t directly affect you your business?

  6. Well,first of all he’s an expert on things scientific,not a legal analyst,and it shows.Second,he’s not merely expressing an opinion,he’s advocating the agenda of a large law firm and promoting the idea of forcing limits on the income of people he doesn’t know in matters he has no stake in.Nothing wrong with that,but it’s worth pointing out how anti-capitalist that is,as Mr. Burch has ably done.

  7. Why are we trying control – again. What is it with people. Just allow the defendant to opt for a ‘jury’ of three judges rather than a regular jury of carefully screened incompetents.

  8. Why are we trying control – again. What is it with people. Just allow the defendant to opt for a ‘jury’ of three judges rather than a regular jury of carefully screened incompetents.

  9. Why are we trying control – again. What is it with people. Just allow the defendant to opt for a ‘jury’ of three judges rather than a regular jury of carefully screened incompetents.

  10. Why is it any of Mr. Bailey’s business what a plaintiff chooses to pay an attorney?

  11. I like the idea of loser pays, just because it seems more fair. After all, if defended’s a re innocent, why are they forced to pay becuase someone else hassled them. After all, they’ve already lost time and suffered stress, etc.

    The downside is that you could see lawyers playing with their rates to make more money if they lose, but still attract clients. For instance, I charge $1000 per hour in court, but there’s a 90% refund if I lose.

    I’m not sure how class action lawsuits would work either. Would you bill the entire class?

  12. As R.B. stated in the article, it is not the plaintiff who’s doing the paying, it is the defendant. And in the case of class action suits, the “plaintiff” is a massive group of people who may or may not even be aware that they are a plaintiff. For example, 3 years ago I got a letter inviting me to sue a large national bank (who also happens to be my employer) for having the audacity to sell me PMI on my mortgage. I had to specifically opt out of the suit. So I’d say those lawyers had pretty effectively hijacked the legal system to enrich themselves. The supposed welfare of the plaintiff was completely ancilliary to their real purpose.

  13. All loser pays will do is effectively price the poor out of being able to afford legal services, because if I’m injured by a company’s negligence, I doubt I’d want to take the risk of not only losing, but having to pay thousands of dollars in my opponents legal fees. What plaintiff could afford to take that risk?

  14. I agree with Alex, “loser pay” would scare off a lot of poor plaintiffs.
    It would, however, make poor victims of SLAPP attacks more able to defend themsselves (Strategic Lawsuit Against Public Participation – like when MCDonald’s sues those guys for passing out MCD’s own nutrional information in front of their store, squashing them with the threat of legal fee bankruptcy).

  15. Incidentally,there’s nothing about Loser Pays in Mr. Bailey’s original piece.It sounds as if,unable to respond to quite reasonable objections by Mr. Burch and others,he’s simply changed the subject.Again,why are the fees paid by strangers to lawyers any of his business in the first place?

  16. Back in the ’70’s some cars were made with gas tank configurations that induced big explosions when rear-ended. The car company (GM? Ford? – can’t remember) did some calculations and, with jury award practices in place at the time, figured that it would cost more to change the design than pay awards from explosions. Financially, it made sense to keep making the death traps and so they did. Punitive damage awards, difficult to predict and sometimes monstrous, were the mechanism to make them cut that shit out and change their design.

  17. Ah Lefty,how unfair of you to bring up market discipline-Mr. Bailey has said that courts are not markets,and that should settle the matter.Don’t you know that large corporations never screw up?You simply lack the sensitivity Mr. Bailey has,the slightest whimper from any corporation in pain never escapes him.

  18. I don’t know about limiting fees paid to trial lawyers, but the punitive damages have got to go. They’re completely random and impossible to calculate. How do you put a money figure on how much “emotional distress” one experiences?

    By the way SMK, I think you summed up “libertarianism” pretty well in point #1 above

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