Texas Senate Passes Modified “Loser Pays” Bill, But Citizens Right Are Still Compromised

As reported here yesterday, after a compromise was reached, the Texas Senate passed the so-called “loser pays” legislation. Before Governor Rick Perry signs off, the bill will go back to the House for final approval (which is expected). Here is a “side-by-side” comparison of the “loser pays” proposal and the compromise agreed to by the Senate.

Governor Perry’s proposal would allow winning parties to recover litigation costs in breach-of-contract suits or if a judge grants a motion to dismiss.

Senate compromise removes the provision allowing the winning party to recover fees in any breach-of-contract case.

Governor Perry’s proposal would direct the Texas Supreme Court to create a procedure for the early dismissal of certain civil claims and expedite the discovery process for cases with claims between $500 and $100,000.

Senate compromise states that judges will be allowed to dismiss early on if a case has no merit. If a motion to dismiss is brought early in a case, the loser of that motion would pay the attorney fees that the prevailing party had accumulated up to that point in the suit.

Governor Perry’s proposal would award attorneys’ fees to defendants if they made an offer to settle, and it was turned down if the jury finds for the plaintiff and makes an award less than 80 percent of the initial settlement offer.

Senate compromise does not allow defendants to recover litigation costs that add up to more than a plaintiff’s final award from the jury — and adds a measure that would allow the plaintiff to collect fees, too, if they win a verdict that’s more than 120 percent of the settlement offer.

True to form, Governor Perry hailed the legislation as good for business. What he doesn’t say it that tort reform of any kind you is bad for Texas citizens. TORT REFORM MAKES ALL CITIZENS LESS SAFE; IT IS CORPORATE WELFARE AT CITIZENS EXPENSE. Tort reform is an effort to take away consumers’ rights to receive fair compensation for serious injuries or wrongful death resulting from an auto accident, medical malpractice, slip and fall, or defective product. Tort reform permits big businesses to be negligent; it pushes for caps on recoveries even in cases of egregious conduct. Personal Injury lawsuits are not simply about money; the threat of a large money verdict creates accountability for gross negligence or wrongdoing and encourages safety measures. If you lessen accountability for wrongdoing, there is little incentive to take preventive measures and/or do things safer. Personal injury lawyers all over the country have always and will continue to fight for your rights. But, will you fight for your own rights or will you let pro-business, anti-citizen politicians sell those rights to the highest corporate campaign contributor?

Lawsuit Financial, the pro-justice litigation company still thinks that “loser pays” legislation and other forms of tort reform represent welfare for corporations; they are harmful to citizens. In this case, without the trial lawyers and consumer advocates groups advocating for Texas citizens, this legislation could have been a lot worse. At least, with this compromise, the legislation will ensure that any Texan who has been wronged will still have access to the judicial system.

So, if you are seriously injured in an accident (this can happen to anyone, even a politician!) and find that you may still be able to pursue justice in a Texas courtroom, be sure to thank a trial lawyer.

Mark Bello has thirty-three years experience as a trial lawyer and twelve years as an underwriter and situational analyst in the lawsuit funding industry. He is the owner and founder of Lawsuit Financial Corporation which helps provide legal finance cash flow solutions and consulting when necessities of life litigation funding is needed by plaintiffs involved in pending, personal injury litigation. Bello is a Justice Pac member of the American Association for Justice, Sustaining and Justice Pac member of the Michigan Association for Justice, Business Associate of the Florida, Tennessee, and Colorado Associations for Justice, a member of the American Bar Association as well as their ABA Advisory Committee, the State Bar of Michigan and the Injury Board.