You've had plenty of responses, but I think a nuance is being missed. In many cases, it is not clear who will win. That is the whole point of the courts: to decide on the cases that are not immediately obvious. The big player has enough money to take the chance and try the court. Even if they lose and have to pay the winner's fees, it would not be a disaster. The small player, however, if forced to pay the winner's fees, can't afford to take the chance of a loss even if they have a very strong case. By having each side pay their own fees except in truly egregious cases, it gives the small players slightly better access to the courts than they might otherwise have.
But surely this can have the opposite effect as well. Take the case of the UK Doctor who was alleged to have joined ISIS by the Daily Mail and subsequently had his house repeatedly vandalised, had to move house for his own safety and was unable to sell his previous house for its full market value because of the ongoing vandalism incidents. The main financial damage to him was the drop in the value of his house[0] and this was less than the cost of pursuing an action for defamation which went all the way to the high court, so in the American system he would be out of pocket in taking this to court even if he won. Further, despite the high cost of a complicated legal action, he was not discouraged from taking out the action in the British system because he knew the newspaper had no evidence as he knew he was not a member of ISIS.
Note also, that in the UK the court asseses the costs to be paid by the loser, you don't just get hit with the defendants lawyers invoice, an estimate has to be submitted before the trial begins, they cannot be disproportionate to the damages being claimed and there are lots of exceptions for things like small claims court costs which are limited.[1]
[0] There was probably some emotional harm and lost earnings in there too, but the house was the big one.
The legal costs are a real damage that he can claim for. It's just that it isn't automatically a given that he would be awarded them. In a case like this, I would expect that he would prevail in such a claim. You can also be awarded punitive damages far in excess of the financial damages.
Edit: I would expect the main claim to be reputational damage with some absurdly high made up dollar value, and if the facts of the case are as you have presented them, the plaintiff would probably win a smaller, but still very high award.
Ahh, so we don’t have punitive damages. IANAL but as I understand it, it has to be a reasonable estimate of the financial loss caused. So if he was off sick from work with stress I’m guessing it would be the difference between sick pay and full pay for the period he was off. Reputation damage would need to show you lost your job or lost clients, since he probably worked for the NHS and I’m guessing he didn’t get fired or suspended this would not be a major amount of money.
You can’t even put punitive damages in a contract, so for example if you hire a builder and write that the house must be finished by date X, or they have to pay Y per week. You can’t select any figure for Y it has to be a reasonable estimate of how much it would cost to deal with the situation i.e rent another house temporarily, pay removals company twice etc. If it’s too high you run the risk of having the term struck out as punitive and therefore getting nothing.
When you say "out of pocket" you're only semi-correct as to the situation on the ground. If you don't have access to funds for a variety of reasons but are pursuing a lawsuit that a firm thinks is highly likely to succeed, then that firm may eat the costs of the trial and negotiate with you to divide proceeds. Additionally that particular case would probably be a great source of PR for the law firm representing the doctor - sometimes big banner cases, especially representing small fish against large corporations, can be worth more to the firm in the long run as a way to attract wealthy clients.
The solution, as I see it, is to fix the misaligned incentives.
A lawyer has every incentive to take a case on contingency, in the hopes that a few of them will strike gold. In doing so, the lawyer is incentivized to never turn down a case, no matter how frivolous.
To fix this, it ought not be the losing plantif who has to pay, but rather in frivolous cases, the losing lawyer ought to pay.
Frivolity can be determined by the judge or jury (perhaps only after unanimous verdicts)
This way, it is the responsibility of the lawyer to take on only cases which have real legal merit, and stop digging for gold.
Edit: I've held this idea for a while and don't see many shortcomings. I would love to see where it falls short if someone disagrees.
> A lawyer has every incentive to take a case on contingency, in the hopes that a few of them will strike gold. In doing so, the lawyer is incentivized to never turn down a case, no matter how frivolous.
No, they are more selective about taking on contingency cases. Every losing contingency case is hours of unpaid work.
"ambulance chaser" is a colloquial term for a reason.
I've sat on a jury for 2 days on a malpractice case that had no factual basis, that relied on a tortured interpretation of medical notes.
We unanimously decided the case for the defendant. Wish we had the opportunity to somehow penalize the lawyer for wasting everybody's time. I'm sure I'm not alone.
The only reason the lawyer took the case was that he was hoping to strike gold, and was a crap enough lawyer that only people who were turned away from better lawyers (because they had no case) came to see him.
Having to pay for the doctor's lawyer sure would have deterred this guy.
The judge can order that in egregious cases. It's not an appropriate role for juries; there are often aspects of the case that the jury doesn't see so they don't have the full picture.
> "ambulance chaser" is a colloquial term for a reason.
What's the reason, and does that reason contravene legal/judicial ethics?
I am suspicious of slang terms like "ambulance chaser" and "jaywalking" that tend to bias the listener in favor of well-funded corporate interests over individual citizens.
>reason the lawyer took the case was that he was hoping to strike gold,
I'm pretty sure that this works pretty much like spam or nigerian prince scams. If the lawyer works on tens or hundreds of such cases some % of those cases could be won and some % will settle to avoid legal costs. Total income might be high enough to justify unpaid work on other cases. I'm pretty sure that you could even partially automate a lot of things (or at least use some templates) for multiple similar cases thereby reducing the amount of unpaid work.
If the finding of frivolity was separate from the verdict, though, it could work. Set the standard as, on a unanimous verdict for the defendant, the jury may decide the case was frivolous on the standard that "no reasonable jury would find the facts as applied to the law to render a verdict in favor of the plantif". It would cause greater scrutiny but cases that have merit would still go forward.
Edit: Also the lawyer would not being charged money to work, they would be getting fined for wasting the court and jury's time. That's like saying a contingency lawyer is working without pay: well yeah, but it's factored into the cost of business. There are still chances for high payout but now there is also a much needed downside.
> If the finding of frivolity was separate from the verdict
Isn't this somewhat handled by awarding "token damages" of $1 or similar? The litigating party "won", but it was determined that they were not actually harmed as claimed.
