The policy probably made more sense back when $20M legal teams didn't exist

That's true, in certain situations, companies can use the system to make it painfully risky to attempt to take action against them.

There's a very different business culture in the UK when it comes to legal threats and I suspect the fact the loser pays both sides plays a big part in that. As a business owner, I'm happy to avoid more commonplace legal nonsense, even if it means there's potential for huge companies to abuse it.

It's not any and all costs. The court makes the loser pay costs that are proportional and reasonable given the issues in the case. Which makes sense as otherwise Google could indeed tell its lawyers to go on a billing spree to hurt the counterparty if they lose.

(Not a lawyer)