This is the Cato Daily Podcast for Wednesday, March 25, 2009.

I'm Caleb Brown.

Should the cost of a lawsuit be higher if you lose?

Marie Griffin, a senior fellow at the Manhattan Institute, an adjunct scholar at the Cato

Institute, believes so-called loser pays would mean sharply reduced frivolous lawsuits

and other improvements to the American legal system, we spoke Friday.

Well, the costs of litigation are quite severe, and ranging into the hundreds of billions of dollars annually.

Now if this was the normal price of justice that would be one thing, but in fact we spend

between two and three times as much as similarly situated Western democracy is spent on litigation.

There are a variety of reasons for this, but my work recently has focused on a rule that

we have in America that's almost unique in the world. Very few other

countries have this rule called the American rule for attorney's fees and what

this means in a nutshell is that each party to a civil lawsuit has to bear their own

lawyers costs regardless of who's right and who's wrong. This is very different

from the rule in place in England in in Germany, in Canada, in Australia,

and most of the other countries that you might think that we'd have something in common with

in terms of our court system. and the outcome of that is very expensive

because the American rule where each party has to bear their own costs encourages

what I call abuse of litigation litigation with a very small chance of success on the merits.

Such lawsuits get settled in the United States because they'll be more expensive for a defendant

to defend than just to pay off the plaintiff to make them go away.

Legal experts believe that a loser pays rule in the United States would reduce so-called frivolous lawsuits.

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