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Texas Adopts Loser Pays

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Just short of two weeks ago, the Texas Senate took a “giant step for mankind,” or at least the American subset of it, by unanimously voting to pass their version of House Bill 274. According to the bill’s senate sponsor, State Sen. Joan Huffman, R-Houston, the aim of HB 274 is to cap court costs and discourage meritless lawsuits.

Fortunately for the people of Texas, and especially small business owners, the powerful Texas Trial Lawyers Association, which had lobbied aggressively against earlier versions of the bill, now supports the current version, which among other concessions, would allow the plaintiff to collect fees too, if they win a verdict that’s more than 120 percent of the settlement offer. The trial lawyers’ support should ensure easy passage by the Texas House, according to observers.

The so-called loser pays legislation is just the latest in a long series of business-savvy improvements Texas, prodded by its governor, Rick Perry, has passed in recent years. In addition to this tort reform bill, Texas had already enacted bills affecting such issues as class action certification and product liability, as well as medical malpractice reforms.

According to National Review Online (NRO),

…the passage of loser pays is yet another example of how Texas has taken the national lead in job creation and the fostering of a strong business climate. Immediately following [Governor] Perry’s earlier reforms, the number of physicians applying to practice [in Texas] rose by 60 percent, filling a increasing need across the state. 

Governors of other states, including Florida, are paying attention to what is happening in Texas. Says NRO,

Perry is blazing an important trail for other governors such as South Carolina’s Nikki Haley, Pennsylvania’s Tom Corbett, Florida’s Rick Scott, Oklahoma’s Mary Fallin, and Alabama’s Robert Bentley, all of who[m] ran and won while proposing similar legal-reform ideas.

The measure must be approved by the House before being sent to Governor Perry for signature.

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About Clavos

Raised in Mexico by American parents, Clavos is proudly bi-cultural, and considers both Spanish and English as his native languages. A lifelong boating enthusiast, Clavos lives aboard his ancient trawler, Second Act, in Coconut Grove, Florida and enjoys cruising the Bahamas and Florida Keys from that base. When not dealing with the never-ending maintenance issues inherent in ancient trawlers, Clavos sells yachts to finance his boat habit, but his real love (after boating, of course) is writing and editing; a craft he has practiced at Blogcritics since 2006.
  • I am a small business owner and have been for 20+ years but never was sued. I was ordered to pay $100K because I sued a drug dealer who was the president of the city council and lived next door to me for First Amendment Retaliation. There weren’t any findings of fraud on my party. There was not jury trial. There weren’t any rule 11(c)(6) orders. There was no opinion. I think the judge in my case, Edward Nottingham, was bribed. This caused a lot of problems for me. I think it would have been better for me if I had murdered my neighbor than sued him but I am too wordy for violence. Another guy died because of government corruption in Steamboat Springs that wasn’t exposed because my case was dismissed without a hearing.

    I think everyone involved in a lawsuit, lawyers, litigants, and judges, should have to sign everything they write under penalty of perjury and that perjury should be prosecuted. I don’t think that lawsuits are so bad because they bring the issues to light.

  • Richard

    “..the passage of loser pays is yet another example of how Texas has taken the national lead in job creation and the fostering of a strong business climate. Immediately following [Governor] Perry’s earlier reforms, the number of physicians applying to practice [in Texas] rose by 60 percent, filling a increasing need across the state.”

    That’s right folks, Quacks who could not make it in other states came racing in to TX after Tort Limits were reduced here to the lowest levels in the nation… Check it out folks, Nationally Texas Health Care is in the bottom 10 States across-the-board… DFW’s “Biggest Health Care System” scored 20-something out of 100 overall, where the two largest and grubbiest inter-city hospitals in the U.S. both scored 90-something out of 100 overall in the same “National Rankings”. “The Great State Of Texas” should be ashamed of this record… A Concerned Texan!

  • Leroy

    Richard makes a good point. Tort Reform attracts doctors with poor malpractice history.

    The best tool for reducing malpractice insurance costs is to reduce the 10% of doctors who cause 60% of the suits, but the AMA refuses to help.

  • This legislation should discourage bad lawyers and their litigious clients WITHOUT letting bad doctors off the hook.

    A legislative body reaches a unanimous decision on a health care issue? That’s good news, and promising.

  • Leroy

    Malpractice caps apply equally to just and unjust suits. Righteous plaintiffs will be hurt as much as unrighteous plaintiffs, while the incompetent doctor goes free. That seems to me to be a perverse result. Shouldn’t we try to filter out unjust suits, honor just suits, and punish bad doctors?

  • Here’s a punishment: each bad doctor (“bad,” in the sense of evil, which often enough, is attended by “bad” in the sense of incompetent) will be designated, by court-order, as the primary care-giver of a bad lawyer (bad, also in the sense of evil, but NOT bad in the sense of incompetent.) After experiencing one or two egregious examination-room indignities (which would be caught on video), the bad lawyer would turn around and sue the bad doctor, in possibly the first legitimate malpractice suit of either of their careers. The trial would be televised, of course, giving new meaning to “The People’s Court.” Malpractice coverage, court costs, caps on rewards…those are details I’ll leave to people having a better head for finance than I, but my sense is that funds would easily be raised by the advertising generated.

  • Clavos

    Ooooh, you have a wicked mind, Irene!

    I like that idea!

  • Texas has the lowest percentage of people covered by health insurance in any state. Its schools are severely underfunded. I’m so happy that these paragons have stepped in to protect ‘beleaguered’ businesses and make Clavos’s heart beat faster — but Perry and his fellow extremists care not a whit about poor people or about trying to get people insured.

    The destructive far-right actions of state legislatures in Texas, Florida, Wisconsin, Indiana and Ohio could well become a factor in next year’s elections, to the GOP’s dismay. Mandated drug urine tests for tens of thousands of Floridians. Mandatory, medically unnecessary sonograms for all women seeking abortions. Mandatory reading by doctors of legislator-written, medically questionable scripts designed to discourage abortion.

    The GOP can’t stop itself from over-reaching…and self-destructing. Their authoritarian and score-settling streak [against trial lawyers, unions, minority voters] threatens to overwhelm their libertarian impulses.

  • Clavos

    Once again, Blogcritics scoops the MSM.

  • Clavos

    Mandated drug urine tests for tens of thousands of Floridians.

    Who are government employees. A good idea, the taxpayers have a right to keep drug users off their payroll.

  • Leroy

    Handy, I think any ‘libertarian’ impulses on the right have long ago been forfeited. The republicans have become the party of snoops and secret cops as they peep in peoples bedrooms and tell them what to eat, drink and consume and what to do with their own bodies.

    At last people and commissions all over the globe are coming out against one of the most egregious and expensive snoop crusades “The War On Drugs” as that stupid war becomes more frustrating and hopeless and expensive.

    The worst thing is that these rightist crusades make the USA look ridiculous around the world.

  • Leroy

    How about mandated drug tests for CEOs, bankers and senators? What the heck drugs were those guys taking when they blew up the economy? They must have been taking SOME hallucinogen! And they always plead some kind of Diminished Capacity when confronted with their failures: “Oh, EVERYBODY thought Iraq had nukes!”.

  • Clavos

    How about mandated drug tests for CEOs, bankers and senators?

    Absolutely, and congress too, as well as the administration, including the president.

    Hell, everybody on the public and private payrolls.

  • The Florida drug tests also apply to anyone who applies for unemployment or welfare benefits. At the applicant’s expense! [Gov Rick Scott just happens to have founded a company that performs drug tests; he transferred his shares to his wife’s name; the results may not be illegal but they are certainly politically tone-deaf.]

    The principal thing you are likely to discover in a urine test is marijuana use. No way to tell if someone had a joint at a party or smokes heavily every day. Means little or nothing…and is certainly no one’s business.

    If a Democrat started pushing policies like these, libertarians would be up in arms. It’s hypocritical that libertarians are keeping silent about the Florida drug test laws and the Indiana [and other states] laws telling doctors what scripted, politically crafted words they must say to patients.

    Rick Scott has also signed laws making it so hard to register voters that the League of Women Voters is ceasing registration efforts in the state.

    Gov Scott has one of the lowest, if not the lowest, approval ratings of all 50 governors. Well deserved.

  • Nix on the War on Drugs! And every time a peon citizen is busted for marijuana possession, a member of the House has to have a cocaine test (via a Q-tip with nasty chemicals stuck up his nostrils) be paid for out of his own dang pocket, not with his taxpayer-provided health care plan.

    That’d end the War on Drugs pdq, and then the source of *so* much of the violence in and near Mexico would be eliminated, too.

  • Bringing the thread back to the subject of medical malpractice, it’s an inconvenient truth on these threads, but if you’d ask MANY* a post-abortion woman if she would rather have seen a sonogram of her child instead of being given the medically inaccurate information that it was just a blob of tissue that can feel no pain, she will tell you through bitter tears that she would give anything, now, to be able to turn back the clock and get the ultrasound instead of being told lies about who or what she was going to abort.

    People who want to argue about medically fragile babies and rape and incest can go right on ahead without me. I’ve been in that kind of conversation enough times at BC to know that if I haven’t caused anyone to reconsider his position with the previous paragraph, I’m certainly not going to find common ground anywhere else around the issue of humans before birth.

    *MANY not ALL. I look forward to your comments, but I will not respond to them, because I already said here I wasn’t talking about you. So happy it worked out for you; I also manage to be civil to liberals who support the US providing innocent-citizen-killing armed drones to Afghanistan and Libya. I do admire, from an aesthetic if not a moral perspective, consistency in a person.

  • Clavos(7).Thankyou, kindly! I got almost as much perverse pleasure drafting
    HR Comment#15.

  • Clavos

    Gov Scott has one of the lowest, if not the lowest, approval ratings of all 50 governors. Well deserved.

    One wonders among whom; the people of Florida elected him, and since he’s not a national official, it matters not what those outside of Florida think of him.

    It’s hypocritical that libertarians…

    Yawn. Everything we do is hypocritical, according to “progressives.”

    …the League of Women Voters is ceasing registration efforts in the state.

    Undoubtedly they’ll be back — flanked by lawyers.

  • zingzing

    “One wonders among whom…”

    i wouldn’t think they’d ask people in north dakota what they think of the governor of florida… pretty sure they were asking floridians. wouldn’t you think?

  • Yes. The newly elected governors of Florida and Ohio [others too] already face buyers’ regret. In Florida, it was a close election, and somebody must have changed their minds: a Quinnipiac poll of registered Florida voters shows 29% approval, 57% disapproval. John Kasich in Ohio recently polled at 56% disapproval, 33% approval.

    It’s not that voters are magically being transformed into liberals. The anger that got Democrats thrown out in the 2010 midterms is still running strong…against the new incumbents. People are fed up with whoever is in charge, even if they just elected them [in some cases this amounts to 10% or 20% of the voters changing their minds after a close election].

    If they are still feeling pissed off next year, we could have a third ‘change’ election in a row…not good news for the president either. But a lot can happen in 17 months.

  • I forgot “life of the mother” in 2nd paragraph, comment #16. Not even the Roman Catholic Church (I’m not an adherent, but I know these things) teaches that a pregnant woman must sacrifice her life for the life of her unborn child. I personally knew a Catholic woman (with uterine cancer) who decided to take the risk anyway, and mother and extra-uterine-child were both doing fine, last time I was in touch. My cousin is another example; three beautiful daughters after three life-threatening pregnancies.

    However, I read about and have also known other women who took the same risk, each delivering a healthy baby and leaving the daddy a widower a few months later.

  • Leroy

    16 is incoherent. What does it have to do with medical malpractice?

  • #22 Are you asking me Leroy, or somebody else?
    If it is the former, I am busy at the moment, but I could plan to answer later on, if that is your wish.

  • Glenn Contrarian

    Clavos –

    You know why I don’t like the concept of ‘loser pays’?

    I remember once when I wrote about how the death rate and cancer rate in the area where I grew up in seemed to be much higher than it should be, and that we contacted the FDA but they didn’t do anything. You replied that’s what lawyers are for.

    Well, in ‘loser pays’, we – a lower-middle-class family from out in the sticks – would have faced corporate lawyers from Monsanto and other chemical giants. You know very well that often cases are not won by the one who should win, but by the one with the better lawyer.

    Could we have afforded a better lawyer than the corporate giants? No way…and as a result, under ‘loser pays’, we would not only have stood little chance of winning the trial, we would also have been forced into bankruptcy by the cost of all those corporate lawyers.

    So call it ‘business-savvy’ you like. All it does is make it that much harder for the little guy to stand up for what’s right. I don’t know about you, but to me, human rights are infinitely more important than corporate rights.

  • Costello

    Loser Pays is about the haves sticking it to the have-nots once again.

  • Glenn or anybody: would a class action suit against Monsanto by the many families affected in that cancer-cluster–a number perhaps large enough to attract the attention of a civil rights organization with good lawyers–have been something that might have helped? I do see your point.

    So now we’ve got the evil corporate lawyer, evil ambulance-chasing lawyer, the litigious legally trained professional who goes from state to state (under the radar) charging his unsuspecting “doctor-of-the-month” with malpractice, or waging frivolous lawsuit warfare against any number of small business owners. So doctors good and bad must pay hefty malpractice insurance fees, and those costs are passed down to us, the healthcare consumer and/or We the Taxpaying People. And of course some small businesses will just go under.

    So to protect the ordinary citizen and small business owners and even ethical corporate giants, you want Tort Reform PLUS more ammunition for the little guy(s) who needs to go up against a corporate giant. It doesn’t necessarily have to be either/or. *Cues up Weird Al.*

  • Glenn Contrarian

    Irene –

    Perhaps…but this was 35-40 years ago. If we had been in or close to a major city, maybe. But this was the Mississippi Delta, and cotton was king. And even if we had been able to secure legal aid by a civil rights organization, we would have faced the wrath of our neighbors who – despite the suspicious numbers of cancers and deaths – would have seen any such action by us as an attack on their livelihoods. I seem to remember that some union organizers have faced opposition from the very workers who were being terribly exploited by their employers.

    This situation wasn’t really any different than what coal miners have faced (even this last year with events leading up to the mine explosion), and what victims of ‘fracking’ continue to face.

    ‘Loser pays’ might give businesses a bit more confidence…but it screws the little people whose lives are torn apart by the corporate inertia that runs over anything in its path to profit.

  • Leroy

    “Loser pays” gives more power to the most powerful so it’s intrinsically biased.

    Overall malpractice costs are small, about 2-3% IIRC from several reports, so it’s not the most important issue facing the citizen today.

    Malpractice “caps” unjustly deprive the most egregiously damaged patients and reward the worst doctors. And caps do nothing to limit ‘nuisance’ suits.

    In the past I read reports (by doctors organizations drawing on state medical agencies data) that 60% of malpractice suits are caused by 10% of doctors. It seems to me that efforts to reduce malpractice should be aimed at doctors rather than at the patients who are harmed. But a big block to that idea is the AMA which is very reluctant to act.

  • Cannonshop

    #28 actually, Leroy, if you win (in a non-loser pays scenario) you lose when you go up against a DuPont or General Motors.

    ’cause, see, you have a rather more limited set of resources than they do.

    otoh, while the risk to the plaintiff is greater, the rewards are more guaranteed, since the entire judgement just might not be gobbled up by court costs, see? One typical corporate tactic, is to stall out the process of the lawsuit until the plaintiff runs out of money, or until any likely judgement will result in negligible benefit to the plaintiff in the event he/she wins-impoverish the guy who just sued you, in other words, as a lesson to others. (“You won, go find a cardboard box now to enjoy your moral victory”)

    Loser pays means the full cost of the suit lands on the guy who lost it-which could be bad, if you sue without an ironbound case, but…it makes frivolous lawsuits less likely, and encourages big corporate defendents to settle out of court rather than having to bear the costs of both their defense, and your attack.

    the PRESENT system favours the rich and powerful-they have much less to lose either facing, or launching, suits than they do under a loser-pays situation.

    Loser Pays just dis-encourages the filing of suits without a strong basis.

  • Glenn Contrarian

    Clavos –

    But in ‘loser pays’, the risk the plaintiff takes on…is everything he has. It doesn’t matter whether it’s a loser-pays or non-loser-pays state, he’s still going to face a team of highly-paid, highly-skilled attorneys, and chances are he’s going to lose anyway.

    But in a ‘loser-pays’ state, he loses everything that a bankruptcy court will take from him. That’s NOT a good deal for the plaintiff…and you know it.

  • Clavos

    That’s NOT a good deal for the plaintiff…

    Only if he hasn’t got a good case, so then he doesn’t sue — no harm, no foul.

  • Quondam Amicus

    Hey Costello! The class warfare jokes don’t work as well without a straight man…

    Loser pays is about making damn sure you have a valid case before filing suit. Ambulance chasers are responsible for the conversion of our civil court system into a circus of extortion, raising medical costs artificially.