"loser pays" does have some disadvantages though - it can actually act to prolong litigation as people will know that if they give up they will face an immediate bill for the other sides costs so they will continue in the small hope they will win.
Doesn't it favour the big guys, though? If I'm a mom-and-pop store and a big guy infringes on my product (for the sake or argument, let's say I have a genuinely good™ patent), were I to sue I'd face the prospect of having to pay however much money it costs them to buy the verdict. I simply would not sue in that case, even if I'd be justified in doing so.
If they have to pay the other side if they lose, there would be a lot less lawsuits, so in the end it probably evens out in terms of strain on the legal system.
NB My wife is a specialist commercial litigation lawyer in the UK and I had discussed this issue with her after seeing it mentioned on HN and she pointed out a lot of issues with "loser pays".
Well, it was a while ago and was probably over a shared bottle of wine... :-)
It was one of those occasions where I probably made some comment about how daft the US legal situation sounded to me and she lectured me with a long list of issues with "loser pays" - as she is far brighter than I am I probably didn't quite appreciate the subtleties other than not to remind myself not to make sweeping statements about the legal system around her...
