This week, for the first time, I am letting someone else do the blogging. Here (with permission) is Andrew Cochran of the 7th Amendment Advocate speaking against proposed legislation that will require all civil litigants who lose a lawsuit to pay their opponent’s attorney’s fees. Mr. Cochran’s essay was published on December 10, 2010:
The Wall Street Journal today commended Texas Gov. Rick Perry for proposing that a losing plaintiff in a civil suit pay all legal costs for the defendant, similar to what is used in the British legal system. Ironically, the WSJ refers to such a change as “revolutionary,” which strikes me as rather ironic, since we fought a real Revolution precisely to stop doing things the British way. But there are substantive reasons to oppose a “Loser Pays” system imposed at any level of government.

My first objection is that any state-imposed economic disincentive artificially limits Americans from exercising their Constitutional rights. Over 500 years of experience with the British legal system led the Founding Fathers to assert time and again that Americans have a right to a civil jury trial equal to the right to a jury trial in criminal cases. James Madison, for one, called the rights enumerated in the 7th Amendment “as essential to secure the liberty of the people as any one of the pre-existent rights of nature.” The Founding Fathers would never have thought about imposing economic barriers to the exercise of “unalienable” rights. Britain has used “Loser Pays” for centuries, but the Founding Fathers and their successors saw nothing about “Loser Pays” worth copying into the American legal system.

Second, plaintiffs often cannot afford to pay their own attorneys at all, except on a contingency fee basis. So “Loser Pays” is inherently pro-defendant, and would especially favor corporate defendants who can outspend any individual defendant. Already the vast majority of incidents of medical malpractice do not result in a legal claim because the costs of bringing the case outweigh the expected recovery. “Loser Pays” provisions will make it even more difficult for victims to assert their rights and seek fair compensation in court, because injured patients cannot risk the possibility of recovering little in damages but having to pay lots for the defendant’s legal fees.

And is the British system really all that attractive? As one professor noted in 2005, a look at the British “Loser Pays” system “reveals a far more complex reality, one full of disputes over fees and related issues, and with plaintiffs… who can win paltry awards and still be owed astronomical legal fees.” No one can reasonably assert that adding “Loser Pays” would magically reduce litigation costs; the American legal system has procedural safeguards not seen elsewhere that raise the cost to all parties, while dispute costs in Britain are set under strict standards. Maybe that’s why only ONE state in the U.S., Alaska, has chosen to institute a “Loser Pays” system in its courts. The aforementioned professor wrote about the Alaska experience that “rather than reducing litigation, they often increased the amount of settlements, because the expenses at stake increased the value of a winning case.” Florida implemented “Loser Pays” for years for medical malpractice cases, then reversed course amidst heavy criticism (even a “Loser Pays” proponent called it “imperfect.”)

And it’s not as if states haven’t tried other forms of tort reform; to the contrary, most have imposed some limits on our 7th Amendment rights, claiming that tort reform would control health care costs. Texas already limits punitive damages and is recognized as one of the most pro-tort reform states in the country. That hasn’t helped medical costs in Texas; the city of McAllen is one of the most expensive health-care markets in the U.S.

“Loser Pays” is another vehicle for limiting our cherished Constitutional rights. Civil suits didn’t cause the Great Recession, the crackup of Wall Street, the Deepwater Horizon explosion and the worst oil spill in the world, or multiple deaths from bad products such as drop-down cribs or defective pacemakers. Civil suits protect our religious liberty and promote local control over excessive bureaucracy, and actually have added consumer protections to products such as toys and cars. Let’s stop trying to take a hatchet to the Bill of Rights.

Thanks to Mr. Cochran for permission to reprint his essay.

“Loser Pays” legislation would make our Founding Fathers cringe.  The rights of ordinary people, including the right of trial by jury in civil cases, were at the heart of the American revolutionary movement.  What was true in 1776 is true in 2011.

You may not have a case you want to bring to court today, but at some time in your life you may have a dispute against a person or company with more resources than you.  I am not talking about frivolous lawsuits – existing laws punish people that file those, and cases with no merit can be thrown out on “summary judgment.”  And I am not just talking about personal injury and wrongful death claims.  The Harris County District Clerk’s website lists over 180 types of civil claims that are filed in court.  “Loser Pays” legislation says you will be treated as a fraud if a jury decides a legitimate dispute against you.

Our legal system thrives when courts provide all citizens with a fair forum to decide controversies.  The cost of litigation has skyrocketed because of abusive tactics by wealthy corporations who treat every lawsuit as a war of attrition, spending their opponents into the ground.  “Loser Pays” legislation is yet another scheme to limit the rights of ordinary people, in this case by scaring them away from exercising their right to trial by jury.