So you want loser pays or tort reform, or have those two ideas just been combined now? A very small segment of the judicial process makes news every day, but it's used to judge the entire system. I'm not saying it's perfect or doesn't need change, but people hear 1% of the stories and freak out.
The problem with what you're describing is that legitimate suits will not go forward because no plaintiff or lawyer will risk having to pay a corporations outside counsel's $800-1,000 an hour price if they lose. Settlement numbers in legitimate cases will decrease, etc etc. all it does is further shift the power in tort cases towards the wealth (which is why big business loves it). You're effectively closing the doors to torts brought by low income plaintiffs. Not really what the judicial system is about.
Take the loser pays to its inevitable conclusion too. No plaintiff whips out the checkbook to cover the couple million (depending on the case) spent by himself and opposing counsel/defendant. So we throw in the lawyer too? What else? Make the debt non dischargable in Bankruptcy (if it's not already that way)? Basically, How do you guarantee the loser pays, and how much of his life are you going to ruin?
I'm not saying "Tort Reform," is a bad idea, but people usually just toss the phrase around without any legitimate ideas. I do agree that no inmate should be able to file a dumbass pro se suit like this though.