Win, but still lose, in defamation law is a post from Overlawyered - Chronicling the high cost of our legal system

Klein: Sweden does pretty well in the economic freedom ranking, currently 43rd of 162 in the Fraser ranking and 19th of 169 in the Heritage ranking. Incidentally, a significant advantage of Sweden over the US is civil law and litigation. The US system is terrible, as it does not have loser-pays and generally makes for shakedowns and extortion. Like most countries Sweden has loser-pays and no exorbitant and capricious damages. I believe that the freedom indexes do not pick up this advantage to Sweden, but I’m not sure. I’ll bet that per capita the US has ten times as much litigation and ten times as many lawyers as Sweden does. A sane court system shows up in ordinary life in Sweden, where trust and flexibility make possible things you don’t see in the US from fear of legal shakedown.

He goes on to recount a tale of emergency medicine that would very likely have gone differently in the United States. [Anders Ydstedt, interviewer, Svensk Tidskrift]

The Swedish advantage in civil process is a post from Overlawyered - Chronicling the high cost of our legal system

Banking and finance roundup is a post from Overlawyered - Chronicling the high cost of our legal system

April 10 roundup is a post from Overlawyered - Chronicling the high cost of our legal system

In Michigan, the American Rule for paying attorney fees has been abolished in civil cases valued at more than $25,000 when filed. I am curious whether anyone has done an analysis to see if this has changed the cost of medical care in Michigan and states that have similarly adopted “loser pays” procedures. I often hear the argument that this is a needed reform, but I never hear an analysis of how this reform has worked where implemented.

In Michigan civil cases valued over $25,000 when filed are argued before a three-attorney panel during pre-trial proceedings. The panel then assigns a value to the case. If both parties accept that value, the case is settled. If either party rejects that value, that party must do 10% better than that value at trial, or they are deemed to have lost, and then they pay the other side’s attorney fees. A plaintiff could get a jury verdict of $100,000 and be deemed the loser if he rejected an award of $90,909.10 or more. This system can be far more punitive than the English Rule.

The problem with any system that shifts the burden of paying for attorney fees to the loser is that it disproportionately impacts the middle class. A poor person does not have to worry about becoming liable to pay the other side’s attorney fees because they don’t have it and the insurance company won’t pursue it. If the insurance company attempts to take what little assets they might have, they will just file for bankruptcy. The insurance company does not have to worry about becoming liable to pay attorney fees because it is a cost borne equally by all insurance companies that do business in Michigan. They just price that risk, like every other risk, into the insurance premium. Only a person who has assets that would not be protected in bankruptcy, and is not wealthy enough to risk paying the other side’s attorney fees, is impacted by a system that shifts the burden to the loser.

So those would be two interesting questions for anyone concerned about the issue to consider: Have “loser pays” systems actually changed medical costs in states that have adopted them, and can “loser pays” systems impact enough litigants to have any effect at all?

Reactions from readers knowledgeable about Michigan legal practice?

A reader query on Michigan fee-shifting is a post from Overlawyered - Chronicling the high cost of our legal system

Now Florida attorneys are rolling out tens of thousands of AOB suits, many of small enough quantum that they can be filed in small claims court, even if the fee entitlement thereby triggered is not so small. In Volusia County, where small claims filings more than doubled to over 12,000 cases in 2017, “a single local law firm accounted for all of that increase — and then some — by filing 8,400 cases that year…. In one example, Advantacare of Florida, represented by Kimberly Simoes, filed a lawsuit against State Farm saying the company had not paid it for services it rendered to Stephen Smith. Advantacare was awarded $789.62 according to court files. Simoes was awarded $39,985 in attorney’s fees. Attorney Mark Cederberg was awarded $3,500 for his expert testimony regarding whether Simoes’ fees were reasonable. About a month after the attorney’s fees were awarded, Advantacare dismissed the lawsuit.” [Frank Fernandez, Daytona Beach News-Journal; earlier here and here]

As I have written elsewhere, the true two-way loser-pays systems that operate in most other legal systems take care to avoid the fee-escalation incentives that typify many one-way fee entitlement laws in the U.S. In particular, they tend to hold fee recoveries below actual outlays, and often decline to reimburse fees unnecessarily expended.

Lawyers milk Florida accident-bill law for one-way fee entitlements is a post from Overlawyered - Chronicling the high cost of our legal system

Mark Pulliam on the origins of loser-pays is a post from Overlawyered - Chronicling the high cost of our legal system

February 14 roundup is a post from Overlawyered - Chronicling the high cost of our legal system

Talked into suing gun dealer, left stranded is a post from Overlawyered - Chronicling the high cost of our legal system

According to news reports last week, the legislature in Oklahoma passed, and Gov. Mary Fallin then signed, a bill whose wording directs judges to award reasonable attorneys’ fees and costs in cases of civil litigation. The provision was part of a bill on certain child abuse lawsuits, and its Senate sponsor said it was believed that the fee provision applied only to those cases until on a closer reading “it seems evident that it makes all civil cases … loser pays,” said Sen. David Holt. “But nobody caught that.”

As someone who has been writing in favor of the loser-pays principle since my first book, The Litigation Explosion, you might expect my reaction to this news (once I stopped laughing) to be positive. After all, there’s nothing wrong with a legislature enacting good policies through inadvertence. (For some legislatures, that seems to be the only way they do enact good policies.)

Sober second thoughts, however, will be less cheerful….

Whole thing here. More: Lowering the Bar.

Oklahoma enacts loser-pays — by mistake is a post from Overlawyered - Chronicling the high cost of our legal system