Beaumont Posted May 10, 2011 Share Posted May 10, 2011 http://www.setexasrecord.com/news/235377-s...rs-class-action (this is the local rag covering the courthouse, funded by the Chamber of Commerce so it has a slant) 'Loser pays' bill passes Texas House in emergency Saturday session 5/9/2011 7:00 PM By Marilyn Tennissen In an emergency session on Saturday, the Texas House of Representatives passed a "loser pays" bill that could change who pays legal fees in certain civil lawsuits. House Bill 274, authored by state Rep. Brandon Creighton, a Republican from Conroe, allows the winning party to recover the costs of litigation in breach of contract suits or cases in which a judge has granted a motion to dismiss if there is no contractual attorneys' fees agreement. On Friday, Gov. Rick Perry declared tort reform an emergency issue, allowing the measure to go ahead of all other bills in the House on Saturday. "I applaud the House and Rep. Brandon Creighton's leadership for moving Texas one step closer to implementing a loser pays system that will help expedite legitimate legal claims and crack down on junk lawsuits," Perry said in a prepared statement on Monday. "This legislation will also protect Texas jobs and stimulate economic opportunity by relieving Texans and employers of the costs and burdens created by frivolous and drawn-out lawsuits. I encourage the Senate to quickly take action on this important legislation." Supporters say the bill would encourage parties to settle, would make it easier to dismiss frivolous lawsuits and would expedite cases, improve court efficiency and decrease court costs, "We congratulate the House on passing this important legislation which is critical to establishing a fair, efficient and predictable civil justice system in Texas," said Richard Trabulsi Jr., president of Texans for Lawsuit Reform, in a statement. "HB 274 will increase the efficiency of our courts by instituting less costly and time consuming court procedures. It also provides incentives for fair and early settlements and imposes risk on those who pursue meritless or abusive lawsuits." Trabulsi also lauded Gov. Perry's leadership and commitment to tort reform. He called the passing of HB 274 another reason "why Rick Perry remains the most effective tort reform governor in the nation." "At CALA many of our supporters have experienced first hand the antics of aggressive personal injury lawyers who file suits that cast a wide net and target many companies - including some companies that should never be part of the suit in the first place," said Chip Hough of Citizens Against Lawsuit Abuse of Central Texas, at a recent meeting of the House Judiciary and Civil Jurisprudence Committee. "The wasted dollars and man-hours spent researching, preparing and fighting lawsuits like this are costing Texas jobs and continued private investment.�� These reforms aren't saying, 'let's eliminate lawsuits altogether.'� We're simply saying, 'bring lawsuits to court that make sense.' We applaud Texas lawmakers for their continued commitment to smart legal reforms that are good for Texas." � The measure has been supported by House Republicans, but Democrats have objected to some of the bill's provisions dealing with attorneys' fees. HB 274 would allow attorneys' fees to be awarded to defendants whose offer to settle the suit is rejected. If the case then continues to trial and the jury awards the plaintiff damages that are less than 80 percent of the original settlement offer, then the defendant is allowed to collect litigation costs from the plaintiff. Currently, defendants can recover the legal fees but only up to the amount the plaintiff actually wins in court. The bill also requires the Texas Supreme Court to adopt new rules for the dismissal of lawsuits as a matter of law and without evidence. Saturday's emergency session was so contentious that most of the Democrats had walked out by the time the measure came to vote. It passed 89 - 12, with 47 members absent. The Senate has not yet acted on the measure. The legislative session ends on Memorial Day. Quote Link to comment Share on other sites More sharing options...
Beaumont Posted May 10, 2011 Author Share Posted May 10, 2011 And now the Trial Lawyer's position as related to me in a mass email ... Dear Mr. Edwardson: The "Loser Pays" bill that was just ramrodded through the Texas House, without debate, should be called "Winner Pays." If this bill becomes law, the winner of the lawsuit may have to pay the loser's attorney's fees. There is no cap on the amount the winner has to pay. A plaintiff - and this includes a small business - can win a lawsuit and go bankrupt. The following scenario can actually happen: 1. Joe's Lawn Service ("Mom and Pop" small business) buys 10 Hodna (company name changed to protect...) tractors at a cost of $100,000. 2. The tractors do not work, costing Joe to lose most of his landscape business. 3. Joe sues Hodna for the $100,000 cost of the tractors plus $50,000 in lost profits. 4. Hodna offers Joe $80,000 to settle. Joe turns it down because he has lost $150,000. 5. Joe goes to trial and wins $60,000. The jury finds Joe had 40% of the use of the tractors, and the judge disallows Joe's lost profits claim on a technicality. 6. Because Joe won less than 80% of Hodna's offer, he has to pay Hodna's attorney's fees and litigation expenses. 7. Hodna's lawfirm has assigned one senior partner ($750/hour), one junior partner ($450/hour), two associates ($250/hour each) and a three paralegals ($100/hour each) to defend the case, and has run up $350,000 in legal fees and litigation costs. 8. Joe is awarded $60,000, less Hodna's $350,000 in legal fees. In other words, Joe has won his lawsuit but owes Hodna $290,000! 9. Joe files for bankruptcy. This can really happen. The current Offer of Settlement rule, Civil Practice Code Section 42.004, subsections (d) and (g) limit the shifting of fees to a reduction of the plaintiff's damage award. Subsections (d) and (g) are repealed by HB 274 - making the amount of fees the winner has to pay the loser unlimited. Under HB 274, a plaintiff can win his lawsuit and end up financially destroyed. The "tort reformers" seek to limit lawsuits for personal injuries and wrongful death. How do they explain this result to small business owners? The moral of the story being told by the advocates of this bill is this: If you have a claim against a big corporation, take whatever they offer, because if you dare to take them to a jury, you risk your economic life. Call and email your state senator. Repealing CPRC 42.004 (d) and (g) turns "loser pays" into "winner pays." Tell your senator to oppose the repeal of CPRC 42.004 (d) and (g)! Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted May 10, 2011 Share Posted May 10, 2011 This sums up the Republican philosophy on tort reform: If you have a claim against a big corporation, take whatever they offer, because if you dare to take them to a jury, you risk your economic life. Quote Link to comment Share on other sites More sharing options...
Caveman_Nick Posted May 10, 2011 Share Posted May 10, 2011 The example given is completely unrealistic. Honda's going to rack up 350K in legal fees to possibly avoid paying $150K Stop it. Quote Link to comment Share on other sites More sharing options...
Hugh 0ne Posted May 10, 2011 Share Posted May 10, 2011 The example given is completely unrealistic. Honda's going to rack up 350K in legal fees to possibly avoid paying $150K Stop it. Ixnay on the Odnahay. Quote Link to comment Share on other sites More sharing options...
billay Posted May 10, 2011 Share Posted May 10, 2011 The example given is completely unrealistic. Honda's going to rack up 350K in legal fees to possibly avoid paying $150K Stop it. Isn't the point of the example that Honda won't pay any legal fees? Quote Link to comment Share on other sites More sharing options...
Caveman_Nick Posted May 10, 2011 Share Posted May 10, 2011 Isn't the point of the example that Honda won't pay any legal fees? I can also prove to you mathematically that 2=1. You just have to find the spot in the math that makes it impossible. Just because someone can think up a scenario does not mean it's ever going to happen. A company is not going to take on a likely bill of $350k plus judgement to avoid a judgement that's a quarter of those costs. Quote Link to comment Share on other sites More sharing options...
billay Posted May 10, 2011 Share Posted May 10, 2011 I can also prove to you mathematically that 2=1. You just have to find the spot in the math that makes it impossible. Just because someone can think up a scenario does not mean it's ever going to happen. A company is not going to take on a likely bill of $350k plus judgement to avoid a judgement that's a quarter of those costs. So would you feel better if Honda ran up 60k in legal fees? Quote Link to comment Share on other sites More sharing options...
TimC Posted May 10, 2011 Share Posted May 10, 2011 If he'd only bought American products instead of Jap crap, he'd still be in business. Quote Link to comment Share on other sites More sharing options...
i_am_the_swammi Posted May 10, 2011 Share Posted May 10, 2011 If the judge disallowed the "lost profits" portion of the lawsuit (33% of the total amount being sought) on a technicality, then he should have technically reduced the amount of the settlement offer by 33% (reducing it from $80K to $54K). Based on this new offer amount of $54K, the amount awarded to Joe was indeed greater than 80% of the Hodna settlement, he would not have to pay any of Hodna's legal fees. Beaumont, I would not want your "Trail Lawyer" as my own. Quote Link to comment Share on other sites More sharing options...
delusions of grandeur Posted May 10, 2011 Share Posted May 10, 2011 (edited) I'll leave the example aside for a minute, since all that does is cloud the issue... The issue to me is the same as the case in the other thread, that it assumes that any case that doesn't rule in your favor necessarily means you were frivolous in even pursuing the case. That simply does not hold true in many cases. Many legitimate cases have been brought forward that were not quite convincing enough for a ruling in their favor. Does that mean their claim is baseless or they were negligent or liable in pursuing it? No, it simply means that they have a tremendous burden of proof of "innocent until proven guilty", where we see countless examples of parties who were likely guilty being exonorated by this burden of absolute proof. What would be more appropriate would be to force lawyers who file suits without proper legal grounding to be liable for reimbursement to all parties involved in the suit, since they are the ones who should really know better whether the case has legal basis... Of course that may never happen, but that doesn't change the fact that a ruling in favor of the defendant DOES NOT necessarily mean that the plaintiff was frivolous in pursuing the suit. Isn't this the exact reason that our legal system allows for a countersuit if it's believed that a lawsuit is frivolous? It most certainly should not just be a given without proper due process to determine this.. Just like the plaintiff bears the burden of the defendant's due process, the plantiff should also be given his/her due process in the form of a countersuit to determine frivolity of lack thereoff. Edited May 10, 2011 by delusions of granduer Quote Link to comment Share on other sites More sharing options...
Savage Beatings Posted May 10, 2011 Share Posted May 10, 2011 This sums up the Republican philosophy on tort reform: Democrat philosophy on tort reform: Hands off our gravy train! Quote Link to comment Share on other sites More sharing options...
Furd Posted May 10, 2011 Share Posted May 10, 2011 I like it, unless, of course, the loser is a cheerleader that invoked her right under the United States Constitution to refuse to cheer at a basketball game. I'll try to give a serious comment later. Its likely just political grandstanding that will not accomplish any of the stated goals. Quote Link to comment Share on other sites More sharing options...
Azazello1313 Posted May 10, 2011 Share Posted May 10, 2011 I actually have some issues with the general idea of loser-pays -- I see pros too, so overall I think I am intrigued but skeptical. but the dumbness of the trial lawyer lobbyist's example, along with the fact that it's coming out of the mouth of a trial lawyer lobbyist, kinda sways me to the other side on this one. Quote Link to comment Share on other sites More sharing options...
Azazello1313 Posted May 10, 2011 Share Posted May 10, 2011 what if there were some sort of cap on how much the loser could pay, as some percentage of the amount in controversy. that way, if hando wanted to spend a bunch of money defending this one case (maybe to forestall future claims on the same issue), that is their prerogative, but the most the "loser" can be forced to pay is 20% of the award. or something along those lines. you'd really have to craft it carefully to keep the weasels from finding some little loophole, but it could probably be done. Quote Link to comment Share on other sites More sharing options...
Beaumont Posted May 10, 2011 Author Share Posted May 10, 2011 The example given is completely unrealistic. Honda's going to rack up 350K in legal fees to possibly avoid paying $150K Stop it. I routinely spend much more than what I could settle the case for on defense costs. Happens all the time. Every lawyer who tries cases will tell you so. Quote Link to comment Share on other sites More sharing options...
Beaumont Posted May 10, 2011 Author Share Posted May 10, 2011 If the judge disallowed the "lost profits" portion of the lawsuit (33% of the total amount being sought) on a technicality, then he should have technically reduced the amount of the settlement offer by 33% (reducing it from $80K to $54K). Based on this new offer amount of $54K, the amount awarded to Joe was indeed greater than 80% of the Hodna settlement, he would not have to pay any of Hodna's legal fees. Beaumont, I would not want your "Trail Lawyer" as my own. Does not work that way. The "settlement offer" is not reduced when part of your case is tossed, by technicality or not. Quote Link to comment Share on other sites More sharing options...
Pope Flick Posted May 10, 2011 Share Posted May 10, 2011 The example given is completely unrealistic. Honda's going to rack up 350K in legal fees to possibly avoid paying $150K Stop it. You should stop it. How's this for a potential conversation: "we've looked at the laws and even if he wins 60k he still has to pay our legal bills." "Go for it." Quote Link to comment Share on other sites More sharing options...
Beaumont Posted May 10, 2011 Author Share Posted May 10, 2011 what if there were some sort of cap on how much the loser could pay, as some percentage of the amount in controversy. that way, if hando wanted to spend a bunch of money defending this one case (maybe to forestall future claims on the same issue), that is their prerogative, but the most the "loser" can be forced to pay is 20% of the award. or something along those lines. you'd really have to craft it carefully to keep the weasels from finding some little loophole, but it could probably be done. My problem with loser pays is that its actually only "Plaintiff Pays" as seen by the tort reformers. If insurance companies had to pay legal fees every time they tried to nickel and dime the plaintiff in an undisputed liability accident, they would freak out. That is why all tort reform legislation makes "loser pays" invokable by the defendant only. If you want loser pays, great. But make it what it is, not just a system to drive down the value of non-frivolous lawsuits. Quote Link to comment Share on other sites More sharing options...
Azazello1313 Posted May 10, 2011 Share Posted May 10, 2011 if the lost profits claim was no good, maybe joe lawnmower ought to turn around and sue his stupid ass lawyer for malpractice, and let him pay hunda. problem solved. Quote Link to comment Share on other sites More sharing options...
Azazello1313 Posted May 10, 2011 Share Posted May 10, 2011 You should stop it. How's this for a potential conversation: "we've looked at the laws and even if he wins 60k he still has to pay our legal bills." "Go for it." again, maybe his dumb ass lawyer should have looked at the case and advised his client to accept the $80K settlement offer. Quote Link to comment Share on other sites More sharing options...
Caveman_Nick Posted May 10, 2011 Share Posted May 10, 2011 You should stop it. How's this for a potential conversation: "we've looked at the laws and even if he wins 60k he still has to pay our legal bills." "Go for it." Amazingly, both sides would know this ahead of time and the plaintiff would be more likely to settle, which would net him more money. Regardless, I am laughing because it's ironic fear mongering. Quote Link to comment Share on other sites More sharing options...
Caveman_Nick Posted May 10, 2011 Share Posted May 10, 2011 If you want loser pays, great. But make it what it is, not just a system to drive down the value of non-frivolous lawsuits. Fair. Quote Link to comment Share on other sites More sharing options...
Pope Flick Posted May 10, 2011 Share Posted May 10, 2011 again, maybe his dumb ass lawyer should have looked at the case and advised his client to accept the $80K settlement offer. I was responding to his laughing at the math, not the quality of the potential plantiff's attorney. But thanks. Quote Link to comment Share on other sites More sharing options...
gbpfan1231 Posted May 10, 2011 Share Posted May 10, 2011 (edited) This sums up the Republican philosophy on tort reform: This sums up the Democrats new strategy...... "Saturday's emergency session was so contentious that most of the Democrats had walked out by the time the measure came to vote" Edited May 10, 2011 by gbpfan1231 Quote Link to comment Share on other sites More sharing options...
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