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The American Rule versus English Rule

Every so often Congress and the states legislatures consider tort reform. One of the worst ideas, I submit, is proposing to adopt the English Rule which forces the loser of a law suit to pay the winner’s legal fees.

I do not expect to lose cases and, frankly, contingent fee lawyers typically take cases which they expect to be successful. (That inclination of plaintiff’s lawyers calls into question the argument that the contingent fee system increases the number of frivolous cases.) Can you imagine, however, sitting down with a working man or woman who contemplates bringing a lawsuit only to be told of the potential of having to pay a defendant’s legal cost. That goes on in Britain. It most assuredly has no place in America. Nevertheless, the Manhattan Institute for Policy Research, a conservative think tank is at it again. On December 11, 2008, it published a detailed ‘Civil Justice Report’ entitled ‘Greater Justice Lower Cost: How a ‘Loser Pays’ Rule Would Improve the American Legal System.’ This Draconian proposal needs a rebuttal. My next blog will address the folly and unfairness of a loser pays approach.

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