I mean, if the company thinks the consumer’s lawyer is a clown, then they’re going to assign a probability of having to pay those attorney’s fees at or near zero. Then you’re back to them valuing the case lower.

But I also get/agree with your point. Please don’t read any of my comments here as an impassioned defense of lawyers or the legal system in general. Just, generally, having a competent lawyer, can drive better outcomes in these cases.

To illustrate: I had a spat with a big dutch telco provider for a 6 figure sum, they gave me the runaround and 'what are you going to do, we're big and you're small' until they got a letter from one of the largest legal offices in NL and they folded on the spot and paid up.

Better lawyers really do drive better outcomes. If the other party is worth suing (a calculus that many people seem to skip).

Well, an incentive for costly lawyering might translate into an incentive for competent people to go into the profession, which does incentivize competent lawyering.

Also, since the counterparty is basically making a financial decision (rather than a moral decision), costly lawyering is competent. The price is part of the service.

It incentivizes lawyers who prefer expensive lawyering.

Competence is an orthogonal question.

Lawyers are basically mercenaries engaged in trial by combat, abstracted to an exchange of relevant facts and opinions.

It's not obvious that a battle between mercenaries is the best way to get a just result.

Considered systemically, lawyers also control legislation.

While it would be better for consumers to have much stronger protections, the people who make money out of weak protections are not incentivized to argue for stronger laws which would reduce their billable hours.