On December 15, I posted about a bill proposed by Texas Governor Rick Perry to force a losing plaintiff in a civil suit pay all legal costs for the defendant, a revolutionary step away from the American rule, in effect for over 200 years, to the British rule of “Loser Pays.” I discussed the reasons why Texans should reject such a move. Now I hear that the Texas legislature might make a bad bill even worse. Attorney Steve Waldman of Houston sent the following to his e-mail list this week:
The initial “Loser Pays” bill applied only to “abusive civil actions.” However, a jury finding against a plaintiff might also find the lawsuit “an abuse of the civil justice process,” which was all it took to bankrupt both the plaintiff and his lawyer. Such a law would scare plaintiffs with legitimate claims away from filing lawsuits. The new version of “Loser Pays”… permits defendants to recover their litigation costs in all lawsuits, not just “abusive civil actions.” It throws small businesses under the bus by including breach of contract cases. The new law also allows for unlimited recovery of costs against winning or losing plaintiffs, meaning a plaintiff can win a lawsuit and owe the defendant money! Any plaintiff – winner or loser – can be forced into bankruptcy!
Steve sent me the original version of the bill, and the newer (and worse) version. I invite Texas attorneys and other “7th Amendment advocates” there to review the bills, then contact your state representatives and tell them to reject the entire concept. It’s a smack in the face of the Founding Fathers’ vision for the right to have a local jury hear a citizens’ claims, since it erects economic barriers to the filing of a suit. I’ll bet Texas doesn’t make it more expensive for its citizens to bear arms in self-defense!
The other strange aspect of this issue in Texas is the inaction of two important groups of attorneys in Texas. First, the state bar association hasn’t issued an official statement for or against the bill; and second, the official association of Texas defense attorneys seems to be all over the ballpark on it. The defense attorneys were against the original bill but are apparently happy with the revised version. Little do they realize that “tort reforming” away civil suits not only abridges unalienable rights, but eventually reduces the need for defense attorneys.
And where are the Tea Party groups in Texas? Why aren’t they raising hell about the business community stripping Texans of their rights?!
I’ve already posted several times on the impact of limits in Texas law on medical malpractice lawsuits. A sweeping “Loser Pays” statute is a clear and present danger to Texans, and they should tell their legislators to reject it.