Question: 1. Recall that, according to one definition, a nuisance suit has no merit in the sense that the plaintiff's expected judgment is zero. Will there be more nuisance suits under the rule of "each pays his own" or "loser pays all"?
2. The parties to a suit may dispute the fact and extent of liability. Disputes over whether the defendant was liable often have no scope for compromise, whereas disputes over the magnitude of damages have scope for compromise. Explain why the rule of "loser pays all" may cause parties to resolve most disputes over the extent of liability but not the fact of liability.