'Loser Pays' Rules Make A Comeback Article Example | Topics and Well Written Essays - 1000 words

Loser Pays Rules Make A Comeback - Article Example infra the current system, lawsuits have proven to be outrageously expensive for corporations. These lawsuits have generated up to $73 jillion being paid by corporations, out of which a staggering amount of $17 billion has do its way into the pockets of plaintiff attorneys. Out of the latter, the plaintiffs fail to claim the amount that rightfully belongs to their corporation. The enforced taxes that should serve to nourish shareholders instead cause more harm due to added litigation charges. Lawsuits are initiated because of a third c whollyer harming the corporations. These lawsuits add to the damage and do little to control the initial problems.Because there are no added be involved, shareholders have been relentlessly filing lawsuits against the third parties that harm corporations. In such an event, the authorities have fixed to implement a loser-pays rule. According to this rule, the party which loses in the trial has to pay the costs incurred by the success as well. Since the trial never really subjects the parties to any costs whatsoever, through this rule, the shareholders will have to retort precautions before going ahead with the lawsuit. This is because the probability of winsome a trial is non definite for all cases. Therefore, shareholders are risking higher costs when initiating a lawsuit. If they lose, they will have to compensate for the resulting costs incurred by the winning party.The loser-pays rule is very different from the American Rule applied in the United States. Under the latter, the long-run shareholders bear the costs of added litigation which are not obvious at the time of the trial. This rule is not new to economies as it has been the basis of shareholder lawsuits in the United Kingdom. If this rule is implemented it would alter the argument model currently being followed by introducing actual financial risk.However, this rule needs to be implemented at the