Civilized countries regulate the rates that lawyers can charge for standard work. Also lawyers get only reimbursed for reasonable costs by the loser. Still expensive, but not absurdly so.

No because lawyer is a protected profession with regulated rates.

Unless your friend happens to actually be a legally licensed lawyer.

No. The fees must be objectively reasonable and usual and customary for the effort and level of skill required. To get fees, you must submit an itemized billing statement that gets picked apart by the other side.

It does, and it absolutely has a chilling effect in countries which don't do things this way.

Sue someone who can spend millions of pounds (for the sake of argument) on defence? Better be certain you can win... against someone who can spend millions of pounds, and probably went to the same public school as the judge.

In America, legal fees can be awarded as additional damages. We should do it more than we do. But given those two options? I'm on Team American Rule, 100%