Thursday, May 26, 2011

Texas Senate Passes Loser Pays Bill That Is Actually Plaintiff Pays

The Texas Senate has passed a lawsuit reform bill that is falsely labeled as moving Texas to a loser pays bill when it really moves to a plaintiff pays bill. In some ways it is a slight improvement over the previously passed Texas House bill, but not by much. Now, at least, a winning plaintiff will not be exposed to more costs and attorney fees than the amount they win at trial. This at least ensures that a winning plaintiff does not end up paying the other side more money than they won when they bring a meritorious lawsuit, just because they made the mistake of rejecting a settlement offer that was better than what they end up receiving after trial. While this is much better, because now plaintiffs with meritorious claims do not have to have nightmares about being forced to file bankruptcy from attorney fees and costs for daring to, heaven forbid, actually try to resolve their case in court before a jury of their peers, this still is a bad bill. The result is still way too harsh and definitely pushes nervous plaintiffs with meritorious claims to accept low ball settlement offers because of the "what if" factor. It would make much more sense to apply this sort of thing to plaintiffs who are somehow repeat players, but it does not really make sense to apply this harsh rule to an ordinary individual who has never filed a lawsuit before.

What Texas should do is move to a straight loser pays system period. If you lose, you pay attorney fees and costs. Period. Texas loser pays is more along the lines that if the defendant wins, plaintiff always pays. But if the plaintiff wins, then they not only have to win, but they have to win more than 120% the defendants last settlement offer before the defendant has to pay.

Overall, this is still an awful bill. And it is also mislabeled. It isn't a "loser pays" bill. It is a plaintiff pays bill. This seems awfully strange to favor the rights of defendants so much over plaintiffs. After all, if a plaintiff brings a meritorious lawsuit, then the defendant has done something wrong that violates the plaintiff's legal rights. So, in Texas, it apparently is much worse to actually bring a lawsuit to defend your legal rights than it is to violate those legal rights in the first place.

Why should a plaintiff who loses a lawsuit always have to pay but a defendant who loses a lawsuit often or even usually does not?

That isn't loser pays, that is plaintiff pays!

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