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He settled, and he did so because of his rising legal costs, which is to say even if he won he would still pay those large legal costs. Under loser-pays rules, if he'd pressed on and won, he would not have paid his legal costs, the other guy would have covered them.

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No. Once his own costs reached a limit where he had to settle, the other side would have had similar if not greater legal costs racked up. Continuing at that point is a double or nothing bet, which might make sense if the odds are in your favour (i.e. you think you'll win) and you can diversify over many such bets. But for a single individual in a single case, it's a huge risk.

The other side was rich. The defendant was not. Don't you think that makes a difference? They weren't on equal footing, that's the whole point.

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