Gov. Rick Perry has signed into law a "loser pays" lawsuit reform bill, which one supporter said will keep Texas from being the national "poster child" of lawsuit abuse.
Under House Bill 274, signed on Monday, some plaintiffs who sue and lose will be required to pay the court costs and attorney fees of those they are suing. The law also creates expedited civil actions for cases less than $100,000.
While some -- including trial lawyer groups -- said the bill will hinder the public's access to legal justice, it had wide support from Texas tort reformers and business leaders.
"With this legislation, Texas continues its strong and steady progress forward, casting off its image as the nation's lawsuit abuse poster child and setting the standard for reform," Chip Hough, a San Antonio businessman and member of the board of directors of Bay Area Citizens Against Lawsuit Abuse said in a statement.
"Once considered the world's courthouse that invited junk lawsuits and promised outrageous damage awards, Texas now invites other states and their legislators to consider our model lawsuit reforms," Hough said.
He said many of the Citizens Against Lawsuit Abuse supporters have first-hand experience with the "antics of aggressive personal injury lawyers."
The lawyers can file suits that target many companies, "including some companies that should never be part of the suit in the first place," Hough said.
"The wasted dollars and man-hours spent researching, preparing and fighting lawsuits like this are costing Texas jobs and continued private investment.
"You can't get more pro-consumer and pro-jobs than a legal system that's no longer burdened and clogged by lawsuits that are filed indiscriminately. We appreciate that reforms aren't saying, 'let's eliminate lawsuits altogether.' We're simply saying, 'bring lawsuits to court that make sense.'
Richard. W. Weekley, chairman and CEO of Texans for Lawsuit Reform, echoed Hough's support of HB 274.
Weekley said Perry's 2011 Omnibus Tort Reform Act brings the most significant lawsuit reforms to the Texas civil justice system "since the asbestos litigation reforms of 2005 ... and the Omnibus Tort Reform Bill of 2003."
Those reforms improved the state's business climate, ended the doctor shortage and expanded access to health care throughout the state, Weekley said.
The legislation will discourage meritless lawsuits by imposing a risk on those who pursue them, he said, and will expedite the movement of cases through the courts, strengthen the statute of limitations and provide incentives for fair and early settlements.
Ryan Brannan, an economic freedom policy analyst with the Texas Public Policy Foundation said giving authority to the Texas Supreme Court to allow a motion to dismiss for filing a frivolous suit would be a "great step forward."
"The procedural protections in this bill will go a long way toward ensuring that our judicial system dispenses justice according to the merits of the case rather than the size of the wallet," Brannan said.
The Texas Association of Business, the Greater Houston Partnership and the National Federation of Independent Business/Texas also released statements in support of the legislation.
"Small businesses sometimes find themselves in the position of having to settle a frivolous claim rather than continuing to fight the suit because it is less expensive," said NFIB Texas Executive Director Will Newton.
"They should be reinvesting their financial resources back into their businesses rather than defending themselves from needless lawsuits."