For example, The Hurt Locker is suing about 25,000 people. It's really unknown (both to the people they're suing and to The Hurt Locker) whether or not the case will succeed. Right now, there's a huge incentive for the individual to settle since the case might see the individual lose hundreds of thousands of dollars. With loser pays, maybe the loss goes from $100,000 to $120,000. However, on the other side, courts might start finding that The Hurt Locker has no case. In a loser pays system, The Hurt Locker could then be out the $20,000 for every suit they've filed.
It puts pressure on people filing a case to make sure they have a good case and aren't just trying to extort a few grand out of someone that will have to pay more money to defend in court. It puts pressure on defendants that are actually in the wrong to settle for a reasonable amount. In cases like this (where we might not have a great indication of where courts will go), it puts pressure on both sides not to overreach. The Hurt Locker wouldn't be suing 25,000 people if they might be on the hook for paying those people should a court decide against them. They'd be more cautious - test the waters, see what happens.
Loser pays is generally seen as protecting the small player. First, they can't claim unreasonable legal fees - they're often decided by the court. Second, usually loser pays incorporates the amount sought. If they're seeking $100,000 and they get awarded $10,000, they're the loser (even though they won an award). That would keep them from asking for too much in their suits since a jury might award actual damages and a little bit more. Likewise, in some areas arbitration processes are used in the process. For example, two legal teams sit down with the arbitrator who looks at stuff and determines an amount $X that seems fair. You think you deserve $10X so you go to trial. You only get $X. You wasted the court's time and money and are on the hook.
It puts pressure on people who are in the wrong to settle and puts pressure on those in the right to accept reasonable offers. Right now, there's no real reason not to sue. The Hurt Locker is pushing out these suits since it's a little administration without a downside. If they could be on the hook for thousands of dollars to those they're trying to sue, they'd think twice about it, about the amount they sued for, and about whether they were sure about the strength of their case.
For example, The Hurt Locker is suing about 25,000 people. It's really unknown (both to the people they're suing and to The Hurt Locker) whether or not the case will succeed. Right now, there's a huge incentive for the individual to settle since the case might see the individual lose hundreds of thousands of dollars. With loser pays, maybe the loss goes from $100,000 to $120,000. However, on the other side, courts might start finding that The Hurt Locker has no case. In a loser pays system, The Hurt Locker could then be out the $20,000 for every suit they've filed.
It puts pressure on people filing a case to make sure they have a good case and aren't just trying to extort a few grand out of someone that will have to pay more money to defend in court. It puts pressure on defendants that are actually in the wrong to settle for a reasonable amount. In cases like this (where we might not have a great indication of where courts will go), it puts pressure on both sides not to overreach. The Hurt Locker wouldn't be suing 25,000 people if they might be on the hook for paying those people should a court decide against them. They'd be more cautious - test the waters, see what happens.
Loser pays is generally seen as protecting the small player. First, they can't claim unreasonable legal fees - they're often decided by the court. Second, usually loser pays incorporates the amount sought. If they're seeking $100,000 and they get awarded $10,000, they're the loser (even though they won an award). That would keep them from asking for too much in their suits since a jury might award actual damages and a little bit more. Likewise, in some areas arbitration processes are used in the process. For example, two legal teams sit down with the arbitrator who looks at stuff and determines an amount $X that seems fair. You think you deserve $10X so you go to trial. You only get $X. You wasted the court's time and money and are on the hook.
It puts pressure on people who are in the wrong to settle and puts pressure on those in the right to accept reasonable offers. Right now, there's no real reason not to sue. The Hurt Locker is pushing out these suits since it's a little administration without a downside. If they could be on the hook for thousands of dollars to those they're trying to sue, they'd think twice about it, about the amount they sued for, and about whether they were sure about the strength of their case.