Defending a Lawsuit (UPDATE)

UPDATE: Just to put these attorney fees in perspective: recently, similar Blackberry litigation resulted in legal fees of over $200 million for a victorious plaintiff's law firm back in 2006. The story for that case is HERE.

Imagine, a major British company needs to defend its patent, so they go to a large law firm in London. The case is to defend a patent for the technology behind the Blackberry. The company wants the finest defense money can buy for its patent, so they instruct the law firm to “leave no stone unturned.” The case is handled by two associates who work for fifteen months. Together, these two associates work 4,540 billable hours. Trainees and paralegals also spend considerable time on the project. A partner takes the case to trial. The culmination of all of this work was a victory. The client was happy. The lawyers were happy. But then the lawyers reveal their bill: a mere $10,320,000.00 (that’s $10.32 million). What complicates matters is that England follows a “loser pays” paradigm; thus, the law firm presented this bill to the court in order to force the losing company to pay. In this case, To make a long story short, a High Court in London rejected the bill. The judge complained, "For these sums of money, one would be entitled to expect each of them to be able to recite all the documents in the case by heart."

While the major law firms seem to (predictably) agree the fee is reasonable, some corporate consumers complain the cost is outrageous to defend a single patent.

I see a couple of issues here. First, the British "loser pays" system seems like a good way to curb frivolous lawsuits. Second, what happens when the defense seeks to pull out all stops to ensure they win their case? Who should pay the bill when the party whom is sued hires the best attorneys and instructs them to leave no stone unturned? In this case, the court decided that the loser only responsible for reasonable fees. Is the "loser pays" system something America should consider adopting?

You can read the story HERE.