Some Reasons To Oppose “Loser Pays” – Part One
For some time now, I’ve been meaning to post about why “loser pays” is a bad idea. Loser pays is a legal concept in which the loser of a lawsuit is forced to pay the legal costs of the winner. Advocates of “loser pays” claim that enacting it would dramatically cut down on the mythical frivolous lawsuits that supposedly clog our court system. I don’t doubt that “loser pays” will cut down on frivolous lawsuits. The problem is that “loser pays” will also dramatically decrease the number of serious and meritorious lawsuits, especially those filed by individuals against corporations. Here’s the first reason I oppose “loser pays.”
To be fair, we’d have to apply it to criminal law, too. Let’s imagine that I’ve been out drinking one night and decide to drive home. I’m not drunk. I’m going through an intersection on a green light, and fail to notice someone else running the red. I t-bone the red-light-runner’s car and the police come. The police give me a blood alcohol test that puts me right at the legal limit. I’m arrested for driving under the influence, and the other driver is not cited for running the red light. I’m given another blood alcohol test at the police station, and it shows me well under the limit. Despite the relatively weak case, the district attorney charges me with DWI, or DUI, or whatever the acronym in the particular jurisdiction is. I hire a competent attorney, and after a jury trial, I’m acquitted. The trial cost me $2,500 – which is a pretty cheap attorney’s fee for a jury trial. Now imagine that the driver who ran the red light sued me for his injuries. I hire another attorney to defend me in the civil case, and pay him another $2,500 dollars. During the trial, I’m able to introduce video evidence from a traffic camera that the other driver ran the red light. The jury finds in my favor. If “loser pays” were enacted, the plaintiff in the civil case would be forced to reimburse me the $2,500 my attorney cost. If that’s fair, then why shouldn’t the state have to reimburse me, too? If I “didn’t do it,” it makes no difference whether my hard-earned dollars are going to a criminal defense attorney or a civil defense attorney; in both instances I was wrongfully prosecuted, and if I’m entitled to be refunded my legal fees in one instance, I must also be refunded my legal fees in the other. Anything less isn’t justice.
Trying to convince citizens to enact a “loser pays” system in criminal cases would be a pretty tough sell. The first argument against doing so would probably be something along the lines of, “What about O.J. Simpson?” Regardless of whether or not he really did “get away with murder” he was in fact found innocent and is still a free man. I’m sure he’d welcome a refund of the millions of dollars he spent on his legal defense team. It is commonly believed that O.J. was able to beat the charges not because he was innocent, but because he was able to dramatically outspend the prosecuting attorneys. Civil defendants, particularly large corporations, also have been known to spend millions of dollars to defend themselves. And despite the myth of “rich trial lawyers,” no plaintiff’s firm in the country could outspend Merck, Ford, or Boeing on any given case. So if you believe that O.J. was in fact guilty, you must be open to the possibility that at least one corporate defendant “got off” by outspending the opposition.
The real danger in enacting “loser pays” in the criminal world isn’t the anomaly of a guilty defendant being refunded millions of dollars. It’s the fact that if “loser pays” were to apply to criminal law, prosecutors would be less likely to prosecute cases that weren’t “slam dunks,” such as those with DNA evidence or witnesses. Prosecuting attorneys would end up making weaker plea bargain agreements than they would prefer in order to avoid the risk of paying the attorney’s fees of the defendant if they were to lose at trial. The concomitant decline in prosecutions and of harsh plea bargain agreements would embolden criminals to commit crimes. And the net result would be that citizens everywhere would lose a measure of safety.
The same results would occur in civil cases. Plaintiff’s attorneys would be less likely to prosecute cases that weren’t “slam dunks,” such as those with drunk drivers or witnesses. Plaintiffs would end up making lower settlement offers than they would prefer in order to avoid the risk of paying the attorney’s fees of the defendant if they were to lose at trial. The concomitant decline in lawyers willing to take complicated cases and the rise in plaintiffs eager to accept confidential settlement offers would embolden unethical manufacturers to release products of questionable safety. And the net result would be that citizens everywhere would lose a measure of safety.
We accept the risk that we may be wrongfully accused of a crime, and if we are, we’re responsible for our own legal fees. We accept that because of the benefits our law enforcement system bestows upon us: The best police force in the world, a nationwide 911 system, a fair jury system in which everyone – even the obviously guilty – have a right to a trial, and a prison system that keeps dangerous citizens away from defenseless citizens.
So too should those behind the “loser pays” movement accept that they may be wrongfully sued, and if they are, that they’re responsible for their own legal fees. They should accept that because of the benefits the civil justice system bestows upon them: The ability to write and enforce even the most complicated of contracts (and to usually recover attorney’s fees in those cases); the best intellectual property system in the world (and to usually recover attorney’s fees in those cases); laws that prevent competitors from poaching key employees; law enforcement personnel that will, at no cost, assist in apprehending corporate spies, software pirates, and music thieves; and a justice system that prevents crooked officials from forcing companies to pay bribes to operate.
Or am I wrong and the state of California should write a big fat check to O.J. Simpson?