“Here’s just one example of the real cost of abusive lawsuits. A family dry cleaning business was recently dragged through two years of litigation by a customer seeking $54 million as compensation for a lost pair of pants. To make matters worse, the person who brought this irresponsible lawsuit was a judge. Though the case was dismissed, the dismissal is now being appealed, and the cleaning business’s legal costs so far have been almost $100,000.” – Rudy Giuliani in a Manhattan Institute report on tort reform.
In the status quo, each party to a lawsuit generally must pay his own legal bills, regardless of outcome. As a result, an innocent defendant will always lose, even if he wins the case, because even if it is dismissed, he will still pay the attorney fees for defending the frivolous lawsuit. As a result, defendant’s will offer to settle cases, even when they know they will prevail if the suit were to go to trial – simply to avoid paying the costs of defending themselves. That doesn’t sound like a good judicial system to me.
As Rudy Giuliani explains in the Manhattan Institute report, “The integrity of our legal system is under assault. Establishing loser-pays rules and other tort reforms can help restore citizens’ faith in the bedrock of society – justice, fairness and the rule of law.”
-Ryan Brannan