"loser pays"

[Int3rested]

Whatever your political affiliation, our Founding Fathers believed that the right to trial by jury was every bit as important to liberty as the right to vote because it puts justice in the hands of the people and not in the hands of the powerful money interests.

At a time when our state legislature should be working to address our state budget crisis, they are instead preparing to pass a new law that literally strips away the rights of individuals and small businesses to bring a lawsuit.

The effect of this new law is simple:

A. If the injured person (or small business) files a lawsuit and loses, he/it will have to pay the insurance company’s attorneys fees, expert witnesses, court costs etc.
B. If the injured person (or small business) wins, but does not win more than 80% of the settlement offer, he/it will still have to pay the insurance company’s attorney’s fees, etc. (which could be more than he was awarded by the jury on his claim). I.e. the victim wins but still loses,
C. If the injured person (or small business) wins more than 80% of the insurance company’s settlement offer he is the ‘prevailing party.’ However, because HB274 will not let a ‘contingency fee’ contract be considered as evidence of attorneys fees, the insurance company never has to pay the victims attorneys fees even when the defense loses.

They are calling the bill “Loser Pays” but that name is a sham. The law is worded to guarantee that the insurance company wins no matter what.
Under this law, HB274, the victim of a drunk driver could have to pay the attorney’s fees of the drunk – even if the victim WINS at trial!

In a nutshell, here is how the law works:

1. ‘Loser Pays’ means that whoever ‘loses’ a lawsuit pays the other guy’s attorney’s fees and costs. (right now each side pays their own)

2. However, ‘Loser Pays’ is not automatic. Under the proposed law, only the insurance company gets decide if ‘Loser Pay’ applies.

3. Even Worse, ‘Loser’ does not mean what you think it means under this law. Assume a drunk driver runs over you and your child. Assume that your damages are $150,000 in medical bills and lost wages but the insurance company only offers $100,000. You decide to go to trial. Unfortunately, the insurance defense attorney is really good and he convinces the jury the accident was partially your fault (for not ‘watching out’ for the drunk as much as you should have) and he also convinces the jury not to give you all of your lost wages because ‘you should have gone back to work sooner’ instead of taking care of your injured child at home. Still, even with all that, you win and the jury awards you $79,000.00. YOU JUST LOST UNDER THIS NEW LAW!

4. Because you only won 79% of the insurance company’s settlement offer, HB274 says you LOST, and YOU HAVE TO PAY THE INSURANCE COMPANIES ATTORNEY’S FEES, TRAVEL EXPENSES, EXPERT WITNESS FEES, AND COURT COSTS. This bill could easily be six figures. Now you owe the drunk driver $21,000
Finally

5. Under this law, if the plaintiff wins big (i.e. more than what the insurance company offered to settle for) the insurance company still gets a free pass because the law also says that when awarding the attorneys fees to the winner, the court can not consider a contingency fee contract as evidence of attorney’s fees. Only big business and insurance companies can afford to hire an attorney by the hour. The only way an individual or small business can afford to hire an attorney is through a contingency fee contract.

This is a call to action. We cannot allow special interests to pull off this kind of power grab that profits off the backs of regular folks. Please take five minutes to call your state senator now! Let him or her know you are opposed to this law because it strips rights away from individuals, families, and small businesses, and gives all the power and advantages to big business and insurance companies.
To find out your State Senator’s contact information, click on the link below or cut & paste it into your address bar:
http://www.fyi.legis.state.tx.us/Address.aspx

The insurance lobbyists have already RACED this law through the state house of representatives. It has already passed the house, but the Senate has yet to vote on this issue. Please contact your State Senator today!

[Boltfan]

I would be interested to hear what some of the plantiff's attorneys in here think of this issue. I know there is already law on the books that if the suing party is awarded a % close to the already offered amount they are required to pay attorney's fees. Had to deal with that one recently and it encouraged the plantiff to accept a much more reasonable offer for their "damages".

[LazurusLong]

I plan on making some calls in the morning. time is running out for some bills to make to through the state so i hope this one, if true as you posted, dies a horrible death in chamber.

[billw1032]

Not sure this is the right answer, but something needs to be done about BS lawsuits. Too many of them cost "innocent" defendants too much money. The lady who sued McDonald's because the coffee she spilled was too hot comes to mind. But she won. These things lead to really dumb warnings on products, too. Don't guess I know the right answer, and don't know who decides which suits are BS, either. There used to be common sense in this country, but no more...

[Lust4xxxLife]

In other words...

1. If *I decide* to sue someone and the court finds in favor of the person I'm suing, I have to cover the legal fees that *I caused* for the other person.

2. If I sue someone that I was in an accident with and the court finds that I'm partially to blame for the accident, *my decision* to sue the other person may result in some legal fees *for me*.

3. If I'm suing someone based on contingency fees *without any personal out-of-pocket expense*, I can't claim any personal out-of-pocket expense if I win.

This doesn't seem so unreasonable to me. If you have a strong case, nothing really changes except that you can't claim expenses that you didn't incur. If your case is less strong, you might want to *think* twice before suing someone because it might cost you something. The model of "might as well sue because I've got nothing to lose" no longer applies.

Some people will no doubt still get burned by this system if it passes, but I'll bet that *more* people and businesses are getting burned today by being on the receiving end of frivolous lawsuits that require them to spend money to defend themselves against someone who is suing them without any out-of-pocket expense.

The current system is pretty flawed, IMHO. This proposal you've described won't be perfect because human judgement is involved, but it sounds better than what we have today, in my opinion.

L4L

[TexRich]

I am all for ending frivolous law suits, so be it!

[LazurusLong]

The number of merit-less lawsuits could easily be reduced by judges tossing them out and fining the attorneys who file them in the first place.

Typical lawsuits against large companies are not won by facts in many cases but because they bleed the small guy to death.

Look at the tobacco industry. For decades they'd win in court because of withholding information and evidence of what they were doing and it wasn't until they started to lose did they seel protection by running to the feds and ponying up large sums of cash that was supposed to be fore victims but once in the government's hands, we all know where it went.

Those losers in the decades of lawsuits against the tobacco companies? In my opinion, I think the courts should have made the families and survivors of ALL those who were lied to and lost pay back all the legal costs AND large punitive damages before they were allowed to even look at negotiating with the Feds but that didn't happen.

There is a need for being able to sue and yes it is abused by many but until penalties for bullshit suits are strong enough to cut them down and penalties against companies who lie like the tobacco firms can out them out of business for good for lying and withholding evidence, nothing will change.

[Lust4xxxLife]

Originally Posted by LazurusLong

The number of merit-less lawsuits could easily be reduced by judges tossing them out and fining the attorneys who file them in the first place.

...

The problem with that idea is that in order for a judge to determine that a case doesn't have merit, it has to be prepared and presented to him/her, otherwise how would a judge decide to toss it? By then, the defendant has already incurred the costs of preparing a defense.

The process described by the OP wouldn't restrict anyone's right to sue, but it would penalize those who put forward weak cases and protect the people who are currently victims of groundless lawsuits. That sounds like a good thing.

Btw, I agree that there is a problem with taking on big companies with seemingly infinite legal budgets. That's a problem today and I don't think the changes discussed here would help (or hurt). Some kind of David and Goliath system is needed to level the legal playing field. I don't have a clue what that might be.