Should the U.S. Adopt the World-Standard “Loser Pays” System in Civil Litigation?

It is an oft-cited statistical fact that Americans are amongst the world’s most litigious people–a dubious distinction that has little to do with American exceptionalism or even our common law legal system. It is a source of great annoyance to me when I hear some “expert” in the popular media pontificate on the psychological or sociological reasons that supposedly have led to our seeming national obsession with litigation–especially when false comparisons are used to try to explain our supposed innate litigiousness (e.g., comparing the U.S. with Japan and pontificating some more about the psycho-social reasons why the Japanese so seldom resort to the courts in comparison to the American penchant for running to the courthouse as a means of dispute settlement).

While there are of course cultural (and perhaps psychological and other sociological) differences between the U.S. and other developed countries, these differences are tertiary rather than primary reasons for the very real difference in litigiousness and the attendant large number of lawyers as a percentage of the population needed to support it. The real reason for our litigiousness is very simple: we have the distinction of being in a unique minority (largely a minority of one) amongst nations in requiring every litigant to pay for their own legal fees–win or lose.

In most all of the world’s nations, the prevailing party is entitled to either a full or partial reimbursement of their legal fees in most civil actions if they are forced to defend themselves against claims by plaintiffs that ultimately fail. Proponents of the “American System” in which attorneys’ fees are almost always paid for by each litigant–win or lose–largely claim that this is the fairest system of justice and that abandoning it for the “Loser Pays” world standard would result in poor people not bringing law suits for fear of having to pay their own attorney’s fees as well as those of the defendant if they do not prevail in court. It is interesting to note that this was not the reason for abandoning the world standard in colonial times; rather, lawyers simply wanted to raise their fees and feared that if the system was not changed, fewer people (read: claimants with weak cases) would not seek their services and they would lose money.

Make no mistake about it: our system is one devised by lawyers, for their own benefit and not as a means of providing greater access to justice. As a result we have become one of the most litigious nations on earth–and one with the most expensive legal costs and longest waits to access courts with perpetually overcrowded dockets that in large cities require a wait of three to five years to get one’s day in court. My friend and Hofstra University colleague, Gene Maccarrone, collaborated on an article on this subject that should be required reading in every civics course and for every informed citizen. You can read the full text of the article and our conclusions here: North East Journal of Legal Studies, Vol. 31, Fall 2014 pp 1-20.

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