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0 pointssteveeq19y ago0 comments

I'm curious. What are the pro arguments for the "American rule"?

0 comments

Suppose you want to sue Megacorp over a few thousand dollars. You're 95% confident of winning, but if you lose, you need to pay Megacorp's legal fees. Megacorp's legal fees are always going to be high, but they can make them even higher than necessary (good luck regulating this), perhaps to the point where if you lose, you're bankrupt.

Result: no one sues Megacorp for small amounts of money. Megacorp can get away with lots of things that they would otherwise be sued for.

(I don't know if this happens in reality, but I do think it's a legit thing to worry about.)

pbhjpbhj9y ago

But in practice, in the UK f.e., actual costs aren't awarded but instead a scale of reasonable costs is set.

That way Megacorp can hire 100 barristers if they want but if you lose you pay ordinary levels of costs. It might still bankrupt an individual but Megacorp can't just financially pressure all opponents in giving up in cases when Megacorp will obviously lose no matter who represents them in court.

Also, Small Claims (which I think USA has too), has very limited awards of costs, I'd usually contended just on paper and covers small charges. Allowing you to sue Megacorp by filling out a simple form and not even enlisting a lawyer.

A system with an assumption of awarding reasonable costs seems most preferable.

stinkytaco9y ago

Just going to brainstorm some ideas, without really being attached to them:

1. The English system doesn't necessarily protect a litigant. A well funded patent troll or a poorly funded but well meaning patent violator is now potentially on the hook for both damages and attorney fees. This is especially problematic when the law favors the accuser (as it seems to do in the American patent system).

2. It's a system that favors the "big guy", the party that has retainers for research, potential suit identification and preparation, not someone who might be accused. This forces smaller parties to invest at least some of their resources in "CYA" rather than doing what they are built to do (make products, for example).

3. It could affect supply of attorneys available to take a case or their fees. Say you feel there's a good chance of beating a wealthy litigant, so you charge more and misjudge? Or you don't feel you could be paid by the opposing party? Grant it, this likely cuts both ways. In the case of patent trolls, it might be beneficial, but perhaps not in others?

cortesoft9y ago

While the English rule does increase the risk of a lawsuit for the plaintiff, it ALSO increases the risk for the defendant by the same amount; both sides face the possibility of having to pay the opponents legal fees.

While the defendant in a patent lawsuit might feel they have an airtight case, it is never certain what will happen in a courtroom. You might lose and need to pay the damages PLUS attorney's fees for the plaintiff.

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