How come loser pays works well in the rest of the world? Because that's not how loser pays works :) You don't pay a million dollars a day, you pay a reasonable price instead; they pay the rest. Also, loser pays is not decided on the whole case, but on specific subcases. So the suing party is less likely to use the shotgun approach where they throw every claim and the kitchen sink in, in the hope that they at least win something. Also, if you claim $1M damages, and the judge awards you $1k, that counts as a (partial) loss. So it also ends ridiculously high claims.

> Nearly every Western democracy, other than the United States, follows the "English rule," which requires the loser of a civil suit to compensate the winner for his or her attorney's fees. -- http://en.wikipedia.org/wiki/English_rule

There is much much more suing going on in the US than in Europe and the prime reason is that Europe has a loser pays system.