The following is an editorial appearing in the Houston Chronicle regarding HB274
House Bill 274 further stacks the legal deck in favor of big-money defendants
Houston Chronicle Editorial, May 14, 2011
The campaign by so-called tort reformers in Texas has long since moved beyond its avowed goal of preventing frivolous lawsuits and massive damage judgments. With the passage of HB 274 by the Texas House last weekend, it has graduated to an all-out assault on the ability of consumers and small business owners to seek legal redress in civil courts against powerful business interests. You might call the latest iteration “stealth tort reform.” The primary damage isn’t in what the bill adds to current law. The injustice is in what it eliminates.
The last major tort reform legislation passed in 2003 in Austin mandated that plaintiffs who spurn settlement offers and win a jury verdict must receive a judgment award of at least 80 percent of the offer. Otherwise, they are responsible for paying legal fees for the losing defendant from the date they refuse the settlement offer. However, those fees could not exceed the amount of the judgment, so at worst the winner went home empty-handed.
That existing provision is already a powerful weapon in the legal arsenal of deep-pocket defendants such as insurance companies and corporations, since plaintiffs would be tempted to accept low-ball settlements rather than risk receiving nothing. It’s not fair, because winning plaintiffs in most tort cases cannot seek reimbursement of their legal fees, only much smaller court costs. The playing field is already sharply tilted in favor of the defendants.
Not content with that advantage, the crafters of this bill have further stacked the deck. It removes limits on the legal fees a winning plaintiff could be forced to pay if they eschew a settlement offer and the judgment falls below that 80 percent margin. Rather than receive nothing, the winner could be tagged with the loser’s huge legal fees. As Houston personal injury lawyer Steve Waldman puts it, “The moral of the story being told by the advocates of this bill is this: If you have a claim against a big corporation, take whatever it offers, because if you dare to take them to a jury, you risk your economic life.”
Florida implemented similar provisions, and the ensuing public outcry forced legislators to repeal it five years ago. We agree with Alex Winslow, executive director of the citizen advocacy group Texas Watch, that HB 274 “is designed to force families and small businesses with valid claims to weigh the possibility of paying the legal costs of insurance companies and multinational corporations [and] is at best detrimental to public accountability and at worst unconstitutional.” The concept of making plaintiffs with valid cases potentially responsible for defendants’ legal fees is a feature of British law that our nation’s founders wisely rejected. It’s a legal concept that should have no place in Texas courtrooms.
It’s hard to believe this legislation was designated by Gov. Rick Perry as an “emergency” to facilitate its already inevitable passage by the House GOP super majority during a raucous, Mother’s Day eve session that ended in flaring tempers and abrupt adjournment. Perhaps the only emergency was the governor’s need to placate his backers at Texans for Lawsuit Reform, a major contributor to GOP state legislators.
*** See these other OP-Ed stories on HB274***
Let’s Focus on the Families
Texas Watch Op-Ed, May 16, 2011
Legislature loses its way with ‘loser pays’ blow-up
The Dallas Morning News Editorial, May 9, 2010
‘Loser pays’ is false advertising
Houston Chronicle, May 10, 2011
Why “Loser Pays” is a Loser
Texas Tribune, May 13, 2011
The British are Coming … Apparently to Texas
The Pop Tort, May 10, 2011