FLASHBACK: What’s Wrong With “Loser Pays” (and Rosie O’Donnell)

[Back in 2007, a ridiculous lawsuit spawned an even more ridiculous pronouncement from Rosie O’Donnell, which prompted the following post (originally titled “The Pants, the Judge, and Rosie’s Mouth”)  on The Ethics Scoreboard. I had forgotten about it, but the issue of “loser pays” still comes up, and Rosie (and Joy Behar) continue to require periodic slapdowns, so here it is again—Jack]

The tale of Roy Pearson, the infamous Washington, DC administrative law judge who is suing his dry cleaner for damages of $65.5 million for a lost pair of pants, would normally warrant scant comment beyond this obvious one: Pierson is a bully, his lawsuit is unreasonable and unethical, and he deserves whatever sanctions the legal system can devise. A Washington Post editorial suggested that the lawsuit, which Pierson says is justified by his inconvenience, court costs, and the mental anguish caused by the loss of his beloved pants, is proof enough of bad character and terrible judgement that he should not be reappointed to another ten-year term.  [ Update: He wasn’t.] That would normally end the issue, freeing me to move on to more important matters, like global warming and American Idol.

And then Rosie O’Donnell opened her big mouth.

Chatting about this idiotic case in her waning days on “The View,” Rosie opined that it shows how our justice system needs a little tweak…

ROSIE O’DONNELL: You know, what’s great in England, if you bring a lawsuit and the other person wins, you have to pay their legal fees. I think we should institute that in America.

JOY BEHAR: That is a good idea.

ELIZABETH HASSELBECK: That is a great idea.

O’DONNELL: That is a great idea! So let’s say you get sued– this guy sues and he ends up losing the $67 million for a pair of pants and, shocking, maybe he’ll lose, then he has to pay the legal fees of the people he sued. I think that would be great.

[Audience Applause]

HASSELBECK: Why don’t we have that?

O’DONNELL: We don’t have that because lawyers have a big lobby in America in the political system.

For those of you who inexplicably don’t watch ABC’s “The View,” Behar is a stand-up comic, Hasselbeck is a “TV personality” whose primary assets are comeliness and the fact that her husband is an NFL quarterback, and Rosie is the current American queen of the vociferous uninformed opinion. These three intellectuals managed to reduce the unique American civil justice system that has protected the innocent, powerless and victimized superbly to a stupid lawsuit over a pair of pants, and misinformed millions of Americans while doing it.

“Why don’t we have that?” That is, why don’t we have the British system that turns every lawsuit into a major financial risk to the plaintiff? We don’t have “that” because it would effectively cut off anyone without millions of dollars to burn from redress from major injuries caused by large and wealthy organizations. America has a contingent fee system in personal injury cases, which means that lawyers get paid only if a case prevails. It also has a system of court-ordered punishments, including court costs and fines, for plaintiffs and lawyers who bring absurd lawsuits like “The Case of the Vanishing Pants.”  But Rosie’s brilliant solution would discourage even the most deserving plaintiffs from suing corporations that sold them deadly cars, bad drugs, fatal toys and other defective products. It would make it harder for working parents to sue negligent hospitals that left their child blind and brain-damaged, and careless surgeons who amputate wrong legs or miss obvious tumors while examining patients. The Catholic Church would have loved Rosie’s system when it was being brought to court for allowing sexual predators to serially molest young boys.

America leads the world in product safety because victims of negligence and callousness can sue without fear of being clobbered by companies that can spend, or threaten to spend, millions in their defense. The big pay-off from contingent fees, some of which are certainly excessive, provides incentive for plaintiff’s attorneys to sink millions of their own into legitimate cases, allowing them to be tried.

Rosie to the contrary, the fact that a litigant loses does not mean that it was a frivolous suit. Her system would be a gift to every manufacturer of a dangerous product, every designer who paid more attention to aesthetics than safety, every bad doctor, every careless driver, every dishonest insurance company, and every shoddy construction company. And you would still get occasional jerks like Pierson filing lawsuits for lost pants.

Good plan, ladies.

And yes, the trial lawyers* have a very effective lobby, and it has helped keep various state reforms of the tort system from tilting so much to the benefit of business and away from individuals that consumer safety in America would be just a memory. Certainly there is self-interest in this, for the contingent fee system has made many of them very rich. It has also saved millions of American lives and prevented untold misery. And the wealth of those lawyers allows them to take litigation risks that their clients never could afford.

Rosie O’Donnell’s ignorant and badly-reasoned rants have been, by turns, amusing, annoying, ridiculous, appalling and funny. This one, however, was irresponsible, because it misled the public about one of the best features of the American justice system, the fact that any citizen can seek redress from injury without having to fear terrible financial consequences if he or she loses. That wouldn’t occur to Rosie O’Donnell, of course, since her mouth has made her millions of dollars and, despite its heavy mileage, will probably make her many more.

It may be too much to ask someone like Rosie to be responsible, but even with someone of her educational and mental limitations should be able to avoid confusing unethical lawyers like Pierson with true champions of the powerless, like Ralph Nader and the thousands of other dedicated trial lawyers who care about lives, not pants.

* Full disclosure: I worked for the Association of Trial Lawyers of America (now inexplicably calling themselves the American Association for Justice) from 1987 to 1994, and, indeed, I am a lawyer myself. My job responsibilities involved publishing, meetings and research, not legislation. I have been critical of the association  from time to time, but I also worked closely enough with its members to appreciate that their dedication to obtaining justice for the injured is at least as fervent as their enjoyment of the income they derive from their efforts.

Thanks to Neil Penny for the reminder!

14 thoughts on “FLASHBACK: What’s Wrong With “Loser Pays” (and Rosie O’Donnell)

  1. This is just one case in point — albeit a crucial one — which makes me wonder who in this world cares about the “views” of primarily ignorant people. A panel called “The View” itself presumes the presentation of opinions that (1) may be vaguely interesting, (2) may be based on some coherent set of perceived facts (be they erroneous or not), and (3) a panel with enough differing views (one hopes at least one will be cogent), to make the conversation interesting.

    What the television “View” consists of is primarily blather espoused by a group of presumed “personalities” whose ideology or ignorance can’t hold the interest of viewers with IQs over 80. That it remains on the air and actually serves as a point of “information” and “views” worthy of attention by some significant portion of the television audience should be a major concern.

    The fact that Rosie et.al. didn’t have the vaguest idea of how civil law works is not laughable, it’s abominable. But it’s par for the course.

    And this is not worth more of my time, because it will never change.

  2. Hi Jack,

    I couldn’t agree more with both your and Elizabeths’ analysis. My question to you, Jack, is, why waste your time commenting on, what in my view, is not so much an ethical violation as opposed to mainstream media appealing to the masses and providing “entertainment” and garnering ratings? The View is solely a Hollywood creation designed to have people watch “stars” give their uninformed opinions. Dumbing down of America at its best. You have bigger fish to fry. Please don’t waste your time commenting on “celebrities” who have no clue what ethics and morals are about. They don’t know how to spell the words. Thanks for your insightful commentary.

    • Dear Joe…I don’t disagree. It is knd of fuuny that you’d mention time, since this was a reprint that saved me some on a horrific day when I didn’t have much. I confess that I used Rosie as a device to elucidate the “loser pays” fallacies< which represent as "fair" what is nothing close.
      Thanks for the kind words.

  3. Our system isn’t perfect, however. How much money did the drycleaners have to pay to defend themselves from a frivolous suit? I don’t think the loser pays is a terrible idea if used for certain cases. For summary judgements that stand up on appeal, I would go for a loser pays system.

    I was in a lawsuit that ended in summary judgement. The district court judge ruled that “The plaintiff has no case, but that understates the circumstances. Even if the plaintiff is telling the whole truth and everything the defendant has said is a lie, the plaintiff still has no case.” The appellate court stated that the district court had overestimated the case the plaintiff had, and the state Supreme Court declined to hear it. The defense attorneys worked pro bono, but the cost of the defense still exceeded $50,000.

    As you point out, the current system allows the little guy to go after the big guy for redress (which loser pays would kill). It also allows the big guy to bully the little guy with frivolous suits (which loser pays would only slow down a little). It is in the latter case that the little guy doesn’t get much help either way.

    • You are correct, sir. It is far, far from perfect, and in many ways is wasteful and unjust. We pay a high price for a system capable of giving powerless victims a way to receive justice from the richest in our society, and genuine tort reforms are needed. There is little wrong with the system, however, that more ethical participants wouldn’t solve. At least there are ways to make our system better. “Loser pays” turns the quest for justice and redress into a craps game that only the wealthy can afford to pay, and that is, I think, unethical.

  4. Normally, when Rosie O. (and/or Joy, Whoopie, et al) espouse an opinion on anything, that endorsement alone is enough to predispose me against it. But. With the old saying about a stopped clock being right twice a day, I do try and spare a few extra brain cells (a commodity I need ration carefully, these days), even for such as her/they.
    Also, I’m wary about endorsing any single idea as THE fix to a problem. Remember a few years ago when term limits on elected officials was touted as the answer to a myriad of political woes? Some jurisdictions adopted term limits and…the woes persist. Even apparently simple problems are oft more complicated than a single fix would rectify.
    So, I have my doubts about loser pays curing whatever ails the American system of torts. But (there it is again). What you say about the current system is true enough, yet leaves some matters unaddressed. Most lawsuits are not frivolous, but a not insignificant number are unsettlingly large, and show no sign of declining. I cannot simply ignore a lawsuit if someone is suing me, however frivolously. I must defend myself. That means that money that might be going toward grocery bills, medical bills, or retirement, instead vanishes into the legal system. Just as bad, or even worse, is the loss of time that must be spent defending oneself, and how much is that worth? For the lawyers involved, it’s no biggie: just another day at the office. For us civilians, however, that time is a big deal, a real big deal. There’s a peace of mind factor, as well. Plaintiffs often cite that as one of the injustices they’ve suffered, yet few people seem to worry about the defendant’s peace of mind should the suit prove without merit.
    Then there’s all the deleterious fallout. The extra costs for products that consumers must pay because increasing legal protection is part of the producers’ overhead. The enjoyable things that we once could do, but no longer can (I’ve been to a large—and growing number—of swimming pools, municipal or at clubs, where there is just a scar on the concrete where once a high dive board was. Sometimes the low boards have been taken out as well.) That particular list goes on and depressingly on.
    My point (I know: at long, suffering last) is that loser pays may not be the fix we need, but the present sytem not only does not work well, it has become debatable as to whether it works at all.

  5. Jack,
    You might want to hold off on the thanks. The paper I was writing for which I used your article as a reference was in favor of the English Rule, not against it. Still, a definitely an article worthy of a reprint.


    • No, that’s fine. There are a lot of smart people in favor of the English system (although there is a strong movement there to emulate OUR system). I’m still grateful you reminded me.

      Boy–I can’t convince you of ANYTHING lately…

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