OK, MC has to pay Attrition's lawyers if they lose. They can do that out of petty cash.
If Attrition's case really is strong, they can get loans, or get their lawyers to work for nothing up front, and thus they can begin to match the level of funding of their richer adversaries. However much MC is willing to throw at them in legal costs, Attrition can throw it right back and make it a fair fight. If MC are willing to spend $10 million on lawyers, then Attrition can match them with $10 million worth of lawyers too.
It's a high stakes gamble, but if your case is strong enough...
In the Australian context a company like MC knows this, and so they don't file bogus suits. Nobody but crazy people with money to burn file bogus suits because there is nothing to gain. You lose the case, you lose a lot of money, and you lose your reputation.
The more common effect of the loser pays system is that when the plaintiff has less money than the defendant the plaintiff will surrender right or wrong, rather than pay the big guy's very expensive lawyer.
I agree that the disadvantage of costs awards is that plaintiffs are less likely to take action against big rich adversaries. But if you do have the guts (and a strong enough case) to take action, the promise of a costs award allows the fight to be fairer, and will generally result in more and fairer verdicts.
We brought the disasters. The alcohol. We committed the murders. - Paul Keating
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