Home > Business Disputes, personal injury > Loser Pays – We all lose.

Loser Pays – We all lose.

The Texas legislature is debating another law at curbing lawsuit abuse.  We need to protect those insurance companies and corporations from being sued by people they injured, either in a personal injury case or a business dispute and what better way to do that than having the loser pay all the legal fees and costs of the winner.   Some of our elected representatives believe this is an issue that demands immediate attention, hold hearings and try to pass this so as to save Texas from…what??

I will get to that in a minute, but first let’s talk about the issues that they are skipping over so they can hold these critical hearings:  education, teacher pay, tax rates, budget issues, etc.   Wow.  I see why we should push those all aside so the big issue of protecting a special segment of society (read political contributors) is made a priority.  Ever notice how anytime they should be tackling the hard issues, suddenly there is a lawsuit crisis.   Funny how all that money the state received from the tobacco litigation was due to the work of trial lawyers.  It was supposed to be for education and health. Where did it all go?  The trial lawyers didn’t have control of it – our representatives did.

Back to the current attack on the justice system and our Texas way of life, loser pays.   Sounds great.  Why shouldn’t the loser pay the attorney fees and cost of the side that won.   That might make some sense if it was even close to the real facts, but what they are trying to pass is a one way street.  If you own a small business and have to sue GE because they haven’t paid you for your work, you could be responsible for all of their lawyers fees and cost if you lose.  Lose means having a jury award less than GE offers.   You go to a lawyer and explain that you don’t have the money to pay to fight them so will she take it with a reduced hourly fee and a percentage of the recovery.  The answer will probably be no.  Under the proposed law you and attorney could be responsible for all the other sides fees and expenses.  So why would a lawyer who is already working at a reduced rate (or on a purely contingent fee in a personal injury case) take the chance.  I know — if you really believe it is a good case you would take it, plus if you win you get all your fees and expenses. Wrong – this law only works one way.  If you file suit and win, they don’t owe your fees or expenses.  How about that for fair.  If you have to sue to recover your medical expenses or for harm to your business because the other side refuses to do the right they and you win — you can’t recover your fees and expenses.  It is only if you lose the other side can recover their fees and expenses.  There is nothing to prevent (in fact it will even encourage) defendants from doing nothing so you have to sue them because they have no risk of having to pay for their frivolous defenses raised just to delay a case and raise the cost of recovery.

The people supporting this claim it will prevent frivolous lawsuits.  We already have rules which allow a Court to dismiss a frivolous case and assess costs against the side the filed such a case.  There are Motions which allow a Court to rule for either side and charge the losing side with costs.  So why is this needed, who does it benefit and why is one sided?  It has nothing to do with frivolous lawsuits and everything to do with money and intimidation.  The real purpose is to prevent people and small companies from daring to sue others  to make them pay for their actions which caused harm.

It has been touted that it is the English Law.  Seems like we had a little disagreement with them about their laws and regulations which led to the creation of our country to begin with, including the lack of being able to seek redress for injuries and wrongs.  Also the English are considering doing away with it and switching to the American system as being more fair.  Also this has been tried in the U.S.  Florida passed a loser pays type of law and five years later had to repeal it.

So here is the highlights.  Try and distract the citizens of Texas from the real issues facing Texas today by creating a crisis that doesn’t exist.  Reward special interest by making it a one way street.  Pass a law that is not needed, has already failed in the state it was attempted and base it upon a country’s law which is considering doing away with it and following what we currently have.  Finally if you go the the list of people who support the bill they include GE a company who makes billions, pays nothing in taxes but feels it needs protection from being sued.  Those who oppose it include MADD a non-profit group who fights for those killed or injured by drunk drivers.

If Loser Pays passes – we all lose.   What do you think?  Have you let your representative know how you feel?

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  1. May 7, 2011 at 6:56 am

    It’s nice to read a post from someone who actually read the bill instead of the propaganda. Isn’t the timing of this bill convenient? Hurricane season and wildfire season are upon us.

    • carpentercarpenter
      May 7, 2011 at 8:54 am

      Stunning timing – TWIA (hurricane insurance company) has failed to pay thousands of claims leading to litigation and the day the loser pay bill was declared an emergency TWIA lost a trial in which they were found to have breached their contract with their homeowners. Stunning. I wonder which side of the loser pays they are on and how much they have contributed to the various representatives?

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