A lot of those points are simply not true in a loser pays system, such as the UK or Australia. > It encourages people to pick the best, most expensive lawyer i

A lot of those points are simply not true in a loser pays system, such as the UK or Australia. > It encourages people to pick the best, most expensive lawyer in town for every case no matter the expense, because your opponent will be picking up the tab. The court determines whether fees being claimed by the winner are reasonable. Bar associations (or the local equivalent) publish fee scales, and the courts will often require winners to cover a portion of their expenses if they determine them to be excessive. If a litigant was found to be deliberately using the most expensive legal representation in an attempt to bankrupt the other party they'd almost certainly be sanctioned. > If, say, your landlord steals your $1500 security deposit for no good reason, are you really willing to risk $5000 in lawyer's fees over $1500? Most loser pays systems offer similar small claims courts, which don't require lawyer. So your $1,500 dispute would go there, rather than to a trial court. > It makes the courts a weapon of last resort rather than the standard dispute-resolution mechanism You have misunderstood what the courts are. They are a measure of last resort. Ask any judge or lawyer: courts expect parties in a trial to attempt to settle. That includes going to non-binding arbitration and making reasonable settlement offers. Courts take a very dim view of parties that don't attempt to settle. In fact, if the loser made a pre-trial offer that was higher than the amount eventually awarded, the courts will often make the winner pay some or all of their own costs. This is on the basis the winner has wasted the court's time: they had a better offer, and they refused to take it.