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Winners Should Recover Costs

In response to:

Why You Won’t Get Your Day in Court from the November 24, 2016 issue

To the Editors:

Judge Jed S. Rakoff’s excellent article on the eight factors that prevent us from getting our day in court leaves one factor out [NYR, November 24]. Except for the United States, every country in the world with a developed judicial system entitles the winners in civil suits to recover their litigation costs from the losers. Our so-called “American Rule” does not.

Not only is the American Rule a massive obstacle to a person’s getting his or her day in court, it has also made ours the most litigious country on earth. Under it, plaintiffs with no evidence to support their claims can sue and nevertheless expect to recover a substantial settlement, because it will cost the defendants more to defend than it is worth. Likewise, defendants with no legitimate defense can nevertheless refuse to pay what they owe, because it will cost the plaintiffs more to sue them than it is worth.

David Slawson
Torrey H. Webb Professor of Law Emeritus
University of Southern California
Olga, Washington

Jed S. Rakoff replies:

Professor Slawson’s point is well taken: the “American Rule” both deters meritorious suits and encourages frivolous ones. It should be noted that in a growing number of instances Congress has reversed the rule and adopted an English-style “loser pays” rule, such as in lawsuits alleging employment discrimination on the grounds of race, sex, and the like and in lawsuits alleging violations of minimum pay requirements and other fair labor standards. While these statutory reversals of the American Rule are not without problems—such as lawyers seeking payment of exorbitant fees when their clients’ recoveries were quite modest—on the whole they have had the salutary effect of making it easier for genuinely aggrieved plaintiffs to obtain some judicial relief in the areas to which these statutes relate. But broader proposals to reverse the American Rule overall have so far met with defeat.

Letters

You Won’t Get Your Day in Court January 19, 2017