No that's (of course!) not how it works here in loser pays-land. For exactly the reasons you mention. Instead, the winner can only claim reasonable fees, so burying the loser in lawyer's hours wont work. There are set scales and standards so you can actually pretty well know in advance what it'll cost you.
And also, if you win, but are awarded less than half of what you sought, that counts as "losing" from the perspective of fees. There's also middle ground where you're ordered to pay part (say 20%) of fees, depending on "how much" you lost. And no punitive damages. If the company needs to learn their lessen, they're fined.
But of course a system like this wouldn't work for the kinds of legal problems where ordinary people would actually see a court. So there are special courts for workplace/employment issues, a special renter's court, etc. where it is cheap (free) and easy to have your case heard. We also have a system of "ombudsman" where there are special government prosecutors that will act on your behalf. e.g. when it comes to consumer issues, or discrimination.
This means that the average Swede never sees the inside of a court, and doesn't even typically know anybody who has. Civil suits are almost unheard of. E.g. traffic accidents are handled by insurance companies, without any court involvement. And if you're unhappy with the insurance company, again, there's a special court for that.