Would a "loser pays the winner's attorneys' fees" rule really reduce frivolous litigation?

In the latest issue of the Legal Affairs magazine, Professor William H. Simon writes that requiring a loser in a civil case to pay the winner's attorneys' fees would be highly effective in combating frivolous litigation.  Here is a link to a portion of that article.  I am, however, not so convinced.

Professor Simon, I think, is correct in suggestion that some of the cases that make the public's blood boil and agitate calls for tort reform are results of judges and juries applying vague standards and reaching bizarre results. I also agree with him when concludes that the current tort reform measures (damae caps) "throw the baby with the bath water" by limiting the right to recover in meritorious and unmeritorious cases alike. 

But the good professor seems to go off track is when he concludes that "'the loser pays' rule would . . . encourage plaintiffs' lawyers to bring fewer claims that have low probability of success."  I do not doubt that such a rule would discourage trials on such claims.  But trials are not the problem - I believe that the current statistic is that only about 12 % of federal civil cases actually make it to trial (I would be shocked if CA state court numbers are any different).  The problem is filing of those lawsuits and putting the burden on the defendant to spend pretrial defense costs as settlement leverage.  It seems that "the loser pays" provision would have only a remote effect on those activities.  If anything, it might give plaintiffs' lawyers an incentive in some cases to bring a claim and use the possibility of attorneys' fees recovery as leverage for settlement.

A good example of why Professor Simon overestimates the effect of a "loser pays" provision is section 998 of the California Code of Civil Procedure (our version of Offer of Judgment under FRCP 68).  Under section 998, a party may make a pretrial offer of judgment and if the other party does not accept, goes to trial, and recovers less than the offer, the party making the offer gets their costs back and, at the court's discretion, expert costs.  In my experience, while this statute has some effect on whether some weaker cases go to trial, that effect is not great and the rule still does not discourage filings.