[jimmywanger]

It has to do with our legal system. If you're a defendant, it's extremely hard to sue your plaintiff to recover legal fees, even if you win the suit.

That's why there are so many frivolous lawsuits in the US. If you can make a halfway reasonable claim that you're not being malicious in filing the suit, and your lawyer is working on a contingency basis, you really have no downside, whereas the guy you're suing has a huge downside.

It's about differing incentives.

[vonmoltke]

However, your lawyer is an idiot of it is taking a case on a contingency basis that it thinks it can't win.

[jimmywanger]

Well, it depends....

There are several variables involved here.

First, what's the possible payout. If the lawyer had a 10% chance to make 10 million, that would be fairly profitable. If he only had a 1% chance to make 10k, not so much.

Second, what else is the lawyer doing? There's a glut of lawyers in the United States right now. If he has his own practice and there's not much business, he might as well take the case. He wasn't getting paid for sure anyways, he might as well take a long shot.

Finally, and the part the makes the US a hotbed for frivolous lawsuits, is the question of whether or not large judgements will be enough of a deterrent for the defendant to settle, regardless of the merits of the case. Look at patent trolls suing amazon, and getting settlements of millions of dollars because they patented an online shopping cart.

Same thing like that, especially if you're a smaller business. The settlements are likely to be lower and the reward less, but they're more likely to pony up 5k to just make the problem go away without the courts getting involved.