[MRM]

Those aren't bad ideas, but they don't solve the problem with frivolous lawsuits. A bad guy like Hugh's house purchasing lawyer is going to sue whether he faces fees and costs or not. If you win and tax costs against him you get to pay your costs and then try to collect against him. Someone who sues frivolously isn't going to be detered by sanctions after the case is judged frivolous.

Auto insurance companies make money three ways. First, they don't rely on underwriting profits exclusively; they have other investments funded by the money they receive in premiums but have not yet paid to anyone.

Second, they increase rates. Between 10 and 30% of your auto rates are accountable to fraud. That's outright fraud - accidents that didn't happen, treatment that was billed but not received, things like that.

Third, they defend cases much more vigorously than the public thinks. The number one expense for insurers is property damage from fender benders and hail damage. Personal injury is a distant second. But there are a lot more property damage claims than there are personal injury claims, so the cost per claim is less although the total cost is more.

Every jurisdiction has rules that allow for costs and fees to be awarded if someone brings a frivolous claim, or defense for that matter. The problem is that your common sense definition of frivolous and the court's standard are two different things. Just try to write a definition of frivolous lawsuit that allows good cases to proceed but screens out the bad ones. It's harder than it seems.