Loser-Pays: Where Next?
Manhattan Institute for Policy Research
George Mason University - Antonin Scalia Law School, Faculty
Maryland Law Review, Vol. 55, No. 3 (1997).
After years of neglect, the loser-pays idea has begun to receive considerable attention in the United States. In this Article, the authors review the compelling arguments in favor of two-way fee-shifting. Among other things, the loser-pays rule reduces speculative litigation, and provides a remedy for victims of vexatious litigation. The authors then survey recent developments regarding the loser-pays rule. First, the authors discuss the remarkable attempt by congressional Republicans to enact a loser-pays rule for certain categories of litigation in federal courts. Next, the authors discuss the recent enactment of limited but distinctive loser-pays rules in Oklahoma and Oregon. In Oklahoma, a defendant can choose to invoke the provision by making an offer of judgment. If he does, the plaintiff who turns down the offer and is awarded less at trial can be liable for attorney's fees incurred by the defendant after the offer. In Oregon, a long list of one-way fee-shifting statutes were converted into two-way statutes. Third, the authors review recent changes to the loser-pays rule in Alaska, the only American jurisdiction with a long-standing, generally applicable, two-way fee-shifting system. Remarkably, loser-pays remains popular among both plaintiffs' and defense attorneys in Alaska. The authors conclude with the prediction that further experiments with loser-pays are likely in the near future.
JEL Classification: K41
Date posted: February 14, 1997