Loser pays: There’s something you may have missed in the heavily blogged decision by a London court against the Beatles record label, Apple Corps, in the lawsuit they filed against Apple Computer. As reported by the BBC, here is the aspect of the case to which I’m referring:
“Apple Corps must pay its rival’s legal bill, estimated at £2m, but the judge refused an interim payment of £1.5m pending further hearings.”
In the U.K. (and most of the world), in a civil lawsuit, the losing party pays the successful party’s attorney fees and other court costs. Sometimes referred to as “loser pays” or the “English rule,” it differs from the U.S. system (the “American rule”) in which both parties pay their own legal fees — no matter who wins or loses. Those who defend the U.S. system argue that “loser pays” would dissuade plaintiffs from bringing legitimate claims — and that would be a loss not only to the plaintiffs (and their attorneys), but to society, as well.
So, hypothetically speaking, let’s say Apple Computer used the U.S. courts to sue some bloggers who were accurately reporting upcoming product launch information. Win or lose, Apple can cause those bloggers to incur a mountain of legal expenses. Even if Apple loses, those expenses must be paid by the bloggers and groups that support them.
To me, the American rule makes about as much sense as the lyrics of I am a Walrus — goo goo g’joob.