What happens when Little Citizen Joe legitimately sues a huge company with lots of legal resources resulting in Citizen Joe getting out-lawyered? Is he burdened with the massive cost of that? Surely the company could drop XXXk in legal bills on him
Similar system works where I live: there’s a well defined attorney hourly fee, which is what is used to calculate the reimbursement of attorney’s fees of the winning party. If you hired better lawyer, you still have to pay the difference from your pocket. Presumably the idea is to limit abusively large fees.
Every mechanism has a means to game it.
It's also worth noting that the UK is lowering the amount of fees you can get back. There's an upper limit on the percentage of fees you can get paid by the other side. This is essentially to introduce a higher cost to litigation through the courts and encourage sides to settle or go through an arbitration process.
It would discourage using an army of lawyers against a small opponent (because it would allow them to hire an army as well), and might also help keep legal costs down in general.
I'm sure it's something that'd be a hard sell, and lawyers would probably hate it, but it's an interesting thought experiment.
Besides, the ability to offload your legal exposure (as opposed to the risk for ordinary debts, where the creditors should have known what they were dealing with) onto shell companies is exaggerated.
Ah, so would the policy will be that those too poor to post a bond would not be allowed access to the courts?
On the flip side, if you can't afford your defence the you can claim legal aid: https://www.gov.uk/legal-aid/overview
"That's Great!" you might say. "Now everyone will make more careful decisions."
Except what will actually happen is people will stop forming companies, since they will be completely liable for things outside their control, like the bad decisions of others or stock market crashes or the weather.
The US corporation system is by no means perfect, but the protection it allows people who are actually trying to create things (read: not patent trolls) really does foster innovation a lot of the time.
http://www.jstor.org/stable/825483?seq=2 http://heinonline.org/HOL/Page?handle=hein.journals/uclr52&d...
But if you want a more casual treatment that explains it (and all the associated issues like why bonds and stocks and debt contracts even exist), I really recommend The Ascent of Money by Niall Ferguson.
When you complain about how high insurance rates are (think medical malpractice), there might actually be "tort" reform against patent trolls.
You do realize, that this is the primary reason that corporations are formed, at least in USA? There are good arguments for the fairly radical proposition that we should end the corporation and the role it plays in our economic system, but you should recognize the scope of the argument you're making.
I tried doing "v United Kingdom" but that wasn't helpful. Maybe knowing the city or region would probably narrow it down.
EDIT: I found this article[1] which I think clears it up for me. [1] http://news.bbc.co.uk/2/hi/uk_news/england/london/3022090.st...
This does actually occurs in some parts of the US legal system. See, for example, California's section 998.
It varies from state to state, and in some cases, claim type to claim type.
Fed. R. Civ. P. 68(d) Paying Costs After an Unaccepted Offer.
If the judgment that the offeree finally obtains
is not more favorable than the unaccepted offer,
the offeree must pay the costs incurred after the
offer was made.
i) loser pays costs.
ii) if Ann is offered £X out of court, but declines it, and the case goes to court and she's awarded £Y then she has to pay costs if £Y is less than £X.
iii) Costs are controlled.
There are considerable problems with the English legal system, and many people are not able to seek justice through the court system. But this kind of thing would probably prevent some of the abuses of the US system.
i) (http://www.legislation.gov.uk/ukdsi/2013/9780111533291/conte...) (http://www.justice.gov.uk/civil-justice-reforms) (http://www.justice.gov.uk/legal-aid/funding) (http://www.justice.gov.uk/legal-aid/areas-of-work/civil/high...)
ii) There was a case some years ago where two women (sisters?) were accused of swapping eggs. They were accused of taking cheap eggs out of the carton and putting expensive eggs in. They were offered a lot of money, but "wanted their day in court", and although the court said they didn't swap eggs the court offered a smaller amount in damages, which got wiped out by the costs they had to pay.
This is the kind of thing that I find tricky to web search for. It seems like it should be easy - ["legal case" "eggs"] and then various supermarket names. I should try limiting the date range to before 2005. But if anyone has any tips about how to better search for it I'd be grateful. (Of course, Usenet news probably has some discussion about it, but Google is sub-optimal for searching their Usenet archive. It's a great shame.)