Posted by Sasha Volokh:
Loser-pays system:
http://volokh.com/archives/archive_2008_12_07-2008_12_13.shtml#1228744256
The Manhattan Institute has released [1]Greater Justice, Lower Cost:
How a "Loser Pays" Rule Would Improve the American Legal System, by my
friend Marie Gryphon. From the executive summary:
Effects of Loser Pays
This paper infers from its examination of the scholarly literature
how loser pays would affect the American legal system:
* Almost every economist who has studied loser pays predicts that it
would, if adopted, reduce the number of low-merit lawsuits.
* A loser-pays rule would encourage business owners and other
potential defendants to try harder to comply with the law. Doing
so should produce fewer injuries.
* Loser pays would deter ordinary low-merit suits, but it would not
discourage low-merit class actions to the same extent because the
risk of enormous losses, rather than the costs of legal defense,
is the primary source of pressure on defendants to settle. . . .
Litigation Insurance
This paper provides an overview of how litigation insurance would
ensure access to justice for poor and middle-class plaintiffs under
an American loser-pays system:
* In loser-pays jurisdictions, insurance covering the legal costs of
the plaintiff can be purchased at the same time that a lawsuit is
filed for a reasonable premium advanced by a plaintiffs' attorney
as part of the ordinary costs of litigation.
* After recently scaling down its legal aid services, which were
funding civil litigation for poor plaintiffs, England witnessed
massive growth in its litigation insurance market; the same thing
is likely to happen in the United States if it adopts a loser-pays
rule.
To be successful in the United States, a loser-pays reform must be
designed to reduce the number of nuisance lawsuits, control overall
litigation costs, promote settlement, and ensure access to justice
for plaintiffs with strong legal claims. To achieve these disparate
goals within the existing American legal system, this new Manhattan
Institute proposal incorporates a modified offer-of-judgment rule,
which ties the amount of any fee award to the size of the parties'
settlement offers, and advocates the removal of legal barriers to
the establishment of a robust litigation insurance industry in new
loser-pays jurisdictions.
Extra bonus: A foreword by Giuliani. Extra extra bonus: My name in the
acknowledgments. Download of the week!
References
1. http://www.manhattan-institute.org/html/cjr_11.htm
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