Walter at Overlawyered discusses a bill introduced by Senator Graham in the article Overlawyered: Sen. Graham introduces loser-pays bill. Given the site title, you don’t have to wonder where Walter is on this side of the argument.
The law, as currently written, only kicks in (that is, the loser pays court costs) only if a settlement was offered. I would like to see if there is some sort of floor for the settlement offer, but I feel this is moving in the right direction. Obviously, if someone’s spouse is brain-damaged because of a faulty product and the settlement offered is $2,000, this doesn’t make sense.
But this will have a chilling effect on suit-happy plaintiffs seeking to get a free meal pass at the expense of businesses. It exposes the lie of lawyers who claim, “If you don’t win, you won’t pay anything”. Yes, under current rules, the plaintiff doesn’t pay (society does). Now the plaintiffs will have “some skin in the game”. Those who have a strong case will hang tough. Those who are looking to cash in for a quick buck will perhaps look elsewhere for a way to earn money.
Of course, there will be apologists who will wring their hands at how the poor down-trodden masses will not be able to go after those wicked, cruel business-scum. Take a step back and breathe for a second, OK? Let us grant that there are business people out to make a quick buck by selling shoddy goods and services. But if we do that, shouldn’t we also grant that there are lying scum out to make a quick buck by suing anyone and everyone in sight?
[Via Ipse Dixit]
“Let us grant that there are business people out to make a quick buck by selling shoddy goods and services. But if we do that, shouldn’t we also grant that there are lying scum out to make a quick buck by suing anyone and everyone in sight?”
Absolutely, but why limit citizen’s rights to sue corporations, but not corporations rights to sue one another? Are B2B lawsuits never frivolous or costly?
The Enron Economy
Microsoft has spent millions defending themselves against baseless lawsuits from companies like Eolas. I think Eoloas has NO case whatsoever, but Microsoft CHOSE to spend that much money on lawyers. They weren’t forced.
Corporations choose to blow millions on their world-class legal teams to defend against every ‘suit-happy plaintiff’ that comes along.
They do it because management becomes incredibly risk averse as real ownership of the company gets diluted among millions of shareholders. It is the opposite of economies of scale and tort reform is no solution.
Corporations already have much less liability for their actions than citizens do. This is despite having more power, more resources and more political influence. You cannot jail a corporation. The modern corporation is an entity created to reduce liability while increasing power. Unleash them and you increase peril while decreasing accountability.