"Loser pays" is a winner
This week in "Their View," seven Republican state representatives co-authored an editorial endorsing Gov. Rick Perry's "loser pays" proposal as the next logical step in our Legislature's effort to enact legal reforms that make our court system fairer and less costly.
"Ensuring that large and small businesses, as well as doctors and other medical professionals, are protected from the cost of defending themselves against junk or questionable lawsuits will further strengthen Texas' economy," State Reps. Warren Chisum (R-Pampa), Tom Craddick (R-Midland), Brandon Creighton (R-Conroe), Kelly Hancock (R-Fort Worth), Linda Harper-Brown (R-Irving), Phil King (R-Weatherford) and Larry Taylor (R-Friendswood) predicted.
The seven reps reported that liability insurance costs are two to three times higher in the United States than in Europe, where "loser pays" prevails.
"A plaintiff should be required to pay the defendant's legal fees in cases where a court determines that a lawsuit is groundless or where a jury determines a suit is frivolous," they argued. "This will provide a necessary and meaningful protection against baseless lawsuits."
We couldn't have said it better.
This reform will not hurt the plaintiff with a legitimate complaint, whether the plaintiff wins or not. The obligation for the loser to pay falls only on those plaintiffs whose claims have been judged groundless or frivolous.
Today our system favors the plaintiff, who is free to hire an attorney on a contingency basis and be unconcerned about any financial need to make a reasonable claim or accept a reasonable settlement.
For the defendant, however, a protracted and costly trial -- even if it ends favorably – can be financially devastating. Given this imbalance, defendants have a perverse incentive to seek a settlement regardless of who has the facts on their side.
Gov. Perry deserves credit for pushing this sensible proposal – as do our guest writers and the other legislative supporters of this measure. We look forward to its swift passage and the benefits it will bring to the courts and the economy.