Peter Thiel vs Gawker

[Martinus]

There's no way to ban this kind of legal bankrolling without gutting the ACLU, NAACP, etc.

Or litigation finance industry.

[alfred russel]

There's no way to ban this kind of legal bankrolling without gutting the ACLU, NAACP, etc.

Those were robust entities when the champerty and maintenance Malthus mentioned were still not accepted.

[The Minsky Moment]

There's no way to ban this kind of legal bankrolling without gutting the ACLU, NAACP, etc.

Technically not true - the Supreme Court case that addressed this issue, NAACP v. Button, held that advocacy by the NAACP (and thus organizations like that) was effectively political expression; thus "in the context of NAACP objectives, litigation is not a technique of resolving private differences."  The Court left open enforcement of traditional common law prohibitions where private gain as opposed to public interest was at stake, or where malicious intent was involved.  There are some states that still have such prohibitions in place; others have gotten rid of them, either directly or by allowing the common law doctrines to fall in abeyance.

Litigation funding services can also be distinguished from the gawker situation because the funder reviews cases on merits, and typically signs a formal agreement setting forth the responsibilities and obligations of the parties so that potential conflicts of interest can be assessed and policed

[viper37]

you remove thiel's ability to pay for someone else's lawsuit, and you hurt civil rights organizations all across the nation. non-orgs that search for especially sympathetic victims to back all the way to the supreme court set the background for a lot of cases where constitutional law developed. that's what the fusion article doesn't get. thiel didn't do anything that hasn't been done many times before; also, liberty is made or broken at the supreme court, not by billionaires funding lawsuits. at the end of the day, gawker overstepped its bounds and got slapped with a $140 mil judgment.

the problem does not lie in the merit of said lawsuit.  It could be totally justified or totally unjustified.  The problem lies in the legal cost that are forced upon you to defend yourself on frivolous lawsuit.  A billionaire is able to spend a few millions here and there in lawsuit to hurt an entity he does not like.  If he loses, there is no consequences.  If he wins, there is maybe a consequence (he says he does it for free, but most likely, if the suit is won, the lawyers fees are reimbursed), but the result is the same for the target: millions of dollars spent on lawyers fees instead of useful activities.

That is the problem I see here.  Legal fees are so high that you can just sue someone into bankruptcy without evern winning, so long as you have deeper pockets.  Which is contrary to what justice is supposed to be.

[grumbler]

the problem does not lie in the merit of said lawsuit.  It could be totally justified or totally unjustified.  The problem lies in the legal cost that are forced upon you to defend yourself on frivolous lawsuit.  A billionaire is able to spend a few millions here and there in lawsuit to hurt an entity he does not like.  If he loses, there is no consequences.  If he wins, there is maybe a consequence (he says he does it for free, but most likely, if the suit is won, the lawyers fees are reimbursed), but the result is the same for the target: millions of dollars spent on lawyers fees instead of useful activities.

That is the problem I see here.  Legal fees are so high that you can just sue someone into bankruptcy without evern winning, so long as you have deeper pockets.  Which is contrary to what justice is supposed to be.

I am not convinced.  The ability to "just sue someone into bankruptcy" seems limited by the fact that frivolous (what you call "totally unjustified") lawsuits will be dismissed with costs.  If a lawsuit has merit and won't be dismissed, then it seems to me that there isn't a problem with appellants proceeding with it.

[Berkut]

Yeah, I am thinking that if someone wants a poster example of abusing the justice system, one where the poor victim was actually and clearly in the wrong is not a great place to start.

[The Minsky Moment]

The ability to "just sue someone into bankruptcy" seems limited by the fact that frivolous (what you call "totally unjustified") lawsuits will be dismissed with costs. 

Taxable costs are usually negligible. Fee shifting is extremely rare. 

[Martinus]

Btw I know that, generally, losers do not pay legal costs of the winner in US lawsuits (one big incentive for frivolous lawsuits, imo) but are there any court fees paid? In Poland (and most of continental Europe) you pay an initial fee which is a percentage of the value of the claim and which you forfeit if you lose (if you win, the loser has to pay the fee instead and your fee is reimbursed). For people who can demonstrate they are unable to pay the fee may be waived or deferred.

This, obviously, greatly disincentivises both frivolous lawsuits and making astronomical claims.

[The Minsky Moment]

Btw I know that, generally, losers do not pay legal costs of the winner in US lawsuits (one big incentive for frivolous lawsuits, imo) but are there any court fees paid?

There can be but it's pretty minimal.  In NY for example, costs that can be assessed include things like witness fees, printing costs, transcript costs, etc., and even some of those are subject to caps.  It is usually measurable in the hundreds of dollars. 

[viper37]

I am not convinced.  The ability to "just sue someone into bankruptcy" seems limited by the fact that frivolous (what you call "totally unjustified") lawsuits will be dismissed with costs.  If a lawsuit has merit and won't be dismissed, then it seems to me that there isn't a problem with appellants proceeding with it.

"dimissed with costs" implies basic legal costs, not full lawyers fee, no?  Out of 20 million$ expense, how much could you hope to regain by having the suit dismissed, a few thousand dollars?

[garbon]

I don't think it's a great development that media orgs may have to look over their shoulder every time they offend the "wrong" person.

If everyone else can live like this I'm sure media orgs can too.

Yeah I think this makes a lot of sense.

[Berkut]

I am not convinced.  The ability to "just sue someone into bankruptcy" seems limited by the fact that frivolous (what you call "totally unjustified") lawsuits will be dismissed with costs.  If a lawsuit has merit and won't be dismissed, then it seems to me that there isn't a problem with appellants proceeding with it.

"dimissed with costs" implies basic legal costs, not full lawyers fee, no?  Out of 20 million$ expense, how much could you hope to regain by having the suit dismissed, a few thousand dollars?

$20 million in legal expenses? WTF?

[Sheilbh]

Yeah, I am thinking that if someone wants a poster example of abusing the justice system, one where the poor victim was actually and clearly in the wrong is not a great place to start.

It's like the Iran-Iraq war of free speech.

[Sheilbh]

Btw I know that, generally, losers do not pay legal costs of the winner in US lawsuits (one big incentive for frivolous lawsuits, imo) but are there any court fees paid?

There are court fees in the UK but they're I think flat rate depending on the court you're issuing in/value of the claim.

The government's just more or less doubled a lot of the fees in part of Michael Gove's interesting idea of effectively taxing law firms in London to subsidise legal aid.

[Barrister]

Court fees are an almost trivial amount of overall legal costs in Canada.  It costs $250 to file a Statement of Claim.

We do have a "loser pays" system however, so there is that disincentive.