Would be nice to have a 'loser pays' court system for civil trials. These kinds of trolls would go away quickly.
It looks like this:
You sell me a broken printer for $30 and I hire a lawyer to sue you for $30,000. I refuse to settle for less and tie things up as long as possible in court. Eventually I 'win' with a court finding of $30 in damages. Then you pay my attorney $50,000 in fees and costs because you 'lost'.
Edit: Possible improvement would be to pay based on the distance between the award and settlement offers?
Also, the cost of the legal fees may not be the same as what "they" paid. In some countries, I think the judge can determine what the fair price for the legal fees. This way the "loser" of the case isn't burned because the other party chose to hire a $1,000/h lawyer.
That's how it works in Germany, basically (the so-called "Baumbach'sche Formel"). You want $30k and get $30: you'll pay (30,000-30)/30,000 = 99.9% of court and attorney's fees. Also, the amount of attorney's fees that can be reimbursed is regulated and therefore capped at a reasonable amount. Finally, you may be required to make a deposit for the court fees beforehand.
Now, if you were representing yourself...
* It encourages people to pick the best, most expensive lawyer in town for every case no matter the expense, because your opponent will be picking up the tab.
* It discourages people from using the courts to resolve their disputes, which means people without resources tend not to get any justice. If, say, your landlord steals your $1500 security deposit for no good reason, are you really willing to risk $5000 in lawyer's fees over $1500? Of course not, you'll let it slide and some little injustice will remain unresolved.
* It makes the courts a weapon of last resort rather than the standard dispute-resolution mechanism. You used to see people dueling in the streets to resolve their problems.
The disadvantage of course is that people can raise disputes with you, and you have to answer them much the same way you can't ignore filing your taxes.
> It encourages people to pick the best, most expensive lawyer in town for every case no matter the expense, because your opponent will be picking up the tab.
The court determines whether fees being claimed by the winner are reasonable. Bar associations (or the local equivalent) publish fee scales, and the courts will often require winners to cover a portion of their expenses if they determine them to be excessive.
If a litigant was found to be deliberately using the most expensive legal representation in an attempt to bankrupt the other party they'd almost certainly be sanctioned.
> If, say, your landlord steals your $1500 security deposit for no good reason, are you really willing to risk $5000 in lawyer's fees over $1500?
Most loser pays systems offer similar small claims courts, which don't require lawyer. So your $1,500 dispute would go there, rather than to a trial court.
> It makes the courts a weapon of last resort rather than the standard dispute-resolution mechanism
You have misunderstood what the courts are. They are a measure of last resort. Ask any judge or lawyer: courts expect parties in a trial to attempt to settle. That includes going to non-binding arbitration and making reasonable settlement offers. Courts take a very dim view of parties that don't attempt to settle.
In fact, if the loser made a pre-trial offer that was higher than the amount eventually awarded, the courts will often make the winner pay some or all of their own costs. This is on the basis the winner has wasted the court's time: they had a better offer, and they refused to take it.
I've been through the small claims process twice recently. In one, the judge had power to make a binding decision and he put an end to the case against me after 10 minutes. In the other, it was a non-binding settlement meeting where he told the other party that they had no chance in court.
My point is that if you give the judge more power, good luck trying to game him and the system.
The expected value of the lawsuit is therefore (0.751500) + (0.25-5000) = -$125, which means that very few people will go after the crooked landlord. If the leasing company has deep pockets, they could slant the outcome even further in their favor. Spend $10,000 instead and the expected value is now -$1,375. This seems wrong.
On top of this, you also have to worry about the risk of ruin. Imagine a bet where Bill Gates pays you $15M if a coin comes up heads, but you pay him $10M if it comes up tails. This bet has a positive expected value (+$5M), but most people won't take it because the losing outcome is completely devastating (unless someone rich is backing you).
I wonder if anywhere has a rule where the winning side receives min(loser's cost, winner's cost). That seems like it might be reasonably fair (if you can keep both sides from cooking the books).
Where I live (Ontario, Canada), the upper limit of small claims court is $25K ($19.5K USD), so you wouldn't necessarily be required to have a lawyer to sue.
* No one in the UK needs to spend $5k on representation to get their landlord to return their deposit, and I think the court would take a dim view of anyone who tried! The law is pretty simple: if the landlord does not return the deposit, less agreed deductions, then the court will order them to return the money, and in addition award a sum between 1x and 3x the value of the deposit. A tenant in your situation would only be out the cost of a few stamps.
* This is a feature, not a bug! Litigation _is_ the last resort, and should only be attempted after all other attempts to settle have failed. The court will take a dim view of a litigant who has not made reasonable attempts to settle, and/or undergo some mediation or other alternative dispute resolution.
There's also rules about what reasonable legal costs are, to deter major bill padding.
But the trial lawyers send tons of money to one of the parties, so our current legal system stays in place.
The fear mongering has been going on ever since:
> An act to institute "Loser pays" laws (H.R.988, passed 232-193, March 7, 1995), limits on punitive damages and weakening of product-liability laws to prevent what the bill considered frivolous litigation (H.R.956, passed 265-161, March 10, 1995; passed Senate 61-37, May 11, 1995, vetoed by President Clinton [2]). Another tort reform bill, the Private Securities Litigation Reform Act was enacted in 1995 when Congress overrode a veto by Clinton.