Texans are upset about lawsuits hindering business and increasing costs. This is the latest chapter in the book of Regional Trial Lawyers Association versus Regional Conservative Business Group for Tort Reform. I understand both sides of the fight. Anyone can slap on a neck brace, pour a bottle of water on a few steps, call an ambulance, file suit, and settle. (I am not recommending fraud, don’t get me wrong). Also, if we restrict plaintiffs to the point that harmed parties are afraid to file valid claims…such as the possibility of paying the loser’s attorney fees, the system will fall apart.
Originally the Texas House was seeking a quasi-English “loser pays” system. What the Texas Senate passed looks almost exactly like California Code of Civil Procedure § 998. The new Texas law would “penalize a litigant for rejecting a settlement offer that is greater than what a judge or jury awards at trial,” as the Wall Street Journal puts it. In addition, it would create penalties for filing frivolous suits. 998 is more of a settlement device than an anti-fraud measure, and can be used by both plaintiffs and defendant’s alike. Congratulations Texas, you have passed a law just like California’s. The media seems to be getting things wrong. The Wall Street Journal article on the law was titled “Texas Legislature Adopts Loser Pays,” but then goes on to say, well not really. The article is available here: http://blogs.wsj.com/law/2011/05/26/texas-legislature-approves-loser-pays/
I had a conservative friend who saw the press coverage come up to me and say, “did you see the new loser pays system in Texas, how about that? Maybe now the frivolous suits will stop!” I had to inform him that Texas failed to pass the loser pays part of the loser pays law…that it passed something that looked just like California law, and that in spite of § 998, California is still the number one state in the nation for fraud. So “conservative” Texas, welcome to the club!