The "Loser Pays" Rule

The "Loser Pays" Rule

In England, the loser in a civil case must pay the legal fees of the winner.  If the plaintiff wins the case, the monetary damages levied on the defendant will include legal expenses.  If the defendant wins the case, the court directs the plaintiff to pay the defendant for his legal expenses.  This requirement is called the "loser pays" rule, or sometimes the "English rule" because of its use in England.

The rationale behind the loser pays rule is to provide an incentive for litigants not to launch frivolous cases, which waste legal resources and empty the wallets of defendants.  The litigation explosion in the U.S. in recent decades has motivated a great deal of interest in adopting the loser pays rule in this country.  The major difficulty with the loser pays rule is that, although it probably deters frivolous suits, it may deter some suits with merit as well.  It seems especially harsh to punish people for launching suits in areas of law where the precedents are unclear or nonexistent, so that it's reasonable to think either side may win.  But frivolous lawsuits also create a heavy burden, so the debate over the loser pays rule turns on the magnitude of this burden relative to the danger of deterring suits that may have merit. 
It is worth pointing out that the American system does have devices similar to the loser pays rule, at least in some jurisdictions.  Some States allow defendants to countersue for payment of legal expenses.  In other cases, a judge may simply order the losing side to pay the legal expenses of the winner (just like the loser pays rule, but subject to the judge's discretion). In pre-trial motions, the defendant may move to dismiss a case that lacks legal merit.  A judge who perceives a case as frivolous can throw it out of court before it even reaches trial.  All of these measures serve to reduce (though not eliminate) the burden of frivolous lawsuits.