A “nuisance-lawsuit” is a lawsuit with little merit that is filed in order to annoy the other party, who will have to spend time and money defending himself. The idea is to force the other party to settle out of court — i.e. pay to make the filer go away. “Costly” means expensive, and “nightmare” means extremely unpleasant — which in this case is a hyperbolic way of saying very annoying. Note: Such lawsuits and out-of-court settlements can be extremely lucrative — for the lawyers on both sides.

Hello Susu, There seem to be two kinds of nuisance lawsuit: 1. The accuser complain that the defendant is causing a problem - for example one person letting their dog bark all night. 2. A lawsuit intended just to cause annoyance to the defendant, to take up and waste their time. An example might be two neighbours who just don't like each other and want to cause trouble. The reference for this information is here: https://legaldictionary.net/nuisance-lawsuit/ Yes, a costly nightmare is as you say, a very unpleasant and expensive matter. Hope this helps, Richard

Phil’s answer is good. I would just add that the costly nightmare is not referencing a particular lawsuit, but the system itself.