In case it's not obvious, here's an example of where it matters. Alice damages Bob's car. Bob offers to settle for £100. Alice says, no, I want £500. Bob says, don't be silly, you can have £150, though that's too much, in my opinion. Alice sues Bob. The court decides that Alice should be compensated, so Alice "wins", and damages should be £80. Who should pay the court costs of £500? (And what if the damages were £300?)
Perhaps everyone already understands that "loser pays" means "the party whose unreasonable behaviour led to the case coming to court pays", but I can't help being suspicious that a reform of the legal system that would drastically reduce the number of cases coming to court might be sabotaged in some way by the people with vested interests who will implement it.
Ok, you lost me on the part where the at-fault party (Alice) is owed compensation by the not-at-fault party (Bob). This makes absolutely no sense.
He just inverted the names: Bob damages Alice's car.
This is outright illegal in countries where lawyers are not allowed to work on contingency and may get a lawyer barred.