Posted by: Deborah D | August 29, 2011

Who do the tort lawyers fear?

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Who do the tort lawyers fear?

Texas has benefitted from Gov. Rick Perry’s focus on an out-of-control legal system that sues at the drop of a hat. He’s thrown a wet blanket on frivolous lawsuits in his state, and the Democrats’ deep-pocket lawyers don’t want that same process done on a national level. So, you know they’ll be throwing the dough in Barack Obama’s campaign if Perry is the Republican nominee. Should be interesting. This is from the New York Post.

…(Rick) Perry, in his 10 years as Texas governor, has managed to implement serious tort reform in a state that even a top litigator concedes was once “the golden goose” for high-end jury verdicts.  Snip –

As John Coale, a former tort lawyer and major Democratic contributor, told Politico: “Most of the guys I know don’t like [President Obama] . . . But when your livelihood, your money’s on the line, it concentrates the mind.”

So they are terrified of a Perry run and possible win as President in 2012. Don’t you feel sorry for these bloodsuckers who would be out of business without doctors, drug companies and damned-near any producer of goods and services to live off of?

Since 2003, Texas has become a model for national tort reform. That year, the state enacted a $250,000 cap on medical liability for non-economic damages.

That reform in particular helped free Texas from excessive medical-malpractice insurance premiums that had driven many physicians out of state (a problem, by the way, now bedeviling New York and New Jersey).

Other reforms include expedited class certification; ensuring that defendants pay only their proportionate responsibility; liability limits for good Samaritans, volunteer firefighters, etc., and reformed product-liability laws, so that local retailers are not on the hook for manufacturers’ mistakes.

And he continues to push a loser-pays system to discourage frivolous lawsuits, barring judges from finding new causes of action from the bench and expediting trials for litigants with legitimate claims.

No wonder the tort bar is quaking. And what an encouraging sight to see so much agitation.

Of course, the litigators may end up regretting any effort to make this a major campaign issue. (Word to the wise: You’re nowhere near as popular as you think you are.)

You can read it all here:

More on loser pays from John Paul Cassil of The Washington Times:

Perry recently signed into law a tort-reform bill designed to eliminate frivolous lawsuits in Texas. Tort reform, once a very popular topic of political debate, has faded into the background of the nation’s economic problems. Snip —

…The American Rule requires each party to pay its own litigation costs, regardless of outcome. Most other Western democracies use the “English Rule,” or “loser pays,” which quite literally means that the loser pays the costs of litigation for all involved parties.

The American Rule has created a very dangerous economic environment for businesses and industries. It has promoted a dynamic in which companies are threatened with lawsuits by “greedy” individuals in unfounded “nuisance” or “frivolous” cases. If it goes to court, the company will win, but at the cost of hundreds of thousands in lawyers’ fees. Defendants who win frivolous lawsuits end up “losing” anyway, because of the costs associated with defending themselves.  Consequently, companies often settle frivolous lawsuits out of court to avoid these costs.

Settling out of court is the prime reason tort lawyers hate the idea of “loser pays.” It’s basically winning without doing anything but threatening the defendant.

If instituted, loser pays would drastically reduce the number of frivolous cases. It would also be fairer to those with legitimate cases: They would be reimbursed for their litigation costs. Because individuals with strong cases who may not have been willing to pay litigation costs would now be able to file suit, it would provide an additional incentive for businesses to be honest, careful, and safe. Snip –

Skeptics assert that loser pays can actually backfire by restricting court access to lower-income individuals. They claim that a loser-pays policy would decrease both frivolous and meritorious cases…Snip –

Could litigation insurance be the answer? Most of the arguments against loser pays are theoretical. Some answers are being provided by observing nations in which loser pays is already the rule. According to the Wall Street Journal, for instance, “Canada, the U.K. and Germany use a system of insuring legal expenses so that those with modest resources can still sue. Individuals can buy such insurance as an add-on to their homeowners’ policies.”

With “after the event” insurance, a plaintiff purchases coverage at a higher premium after the incident has occurred. This type of insurance could give insurance companies the power to be “gatekeepers” to the courts. However, insurance companies would likely only refuse insurance when plaintiffs are likely to lose, thus reinforcing the original intent of the loser pays system: curbing frivolous lawsuits. According to Richard Nagareda, a Vanderbilt University Law School Professor, “Insurance definitely strengthens the argument for loser pays.”

The outcome of the “loser pays,” or “English Rule” debate in the United States will have a substantial impact on tort cases. In my opinion, coupled with litigation insurance, the pros of such a system would outweigh the cons. Loser pays makes sense, will improve the efficiency of tort law, and promises fairer outcomes in tort cases. Under loser pays, if Emily won, she would actually be compensated for all of damages inflicted by her physicians. If she lost, all of her litigation costs, and those of the defendants, would be covered by her insurance.

Will Perry, after having signed loser pays in Texas, push for federal tort reform? If so, what role will State’s Rights play in the debate?

So, no wonder the legal profession is scared to death of a Perry administration. Their rolling-in-the-dough, living-off-of-the-producer-class way of making money might very well be in jeopardy. However, even with Perry in the White House, just how many legislators in Congress are lawyers? How many would actually vote to hurt their previous profession? Good question. Read it all here:


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  1. I’m for putting the rolling-in-the-dough, living-off-of-the-producer-class way of making money in jeopardy. While I do feel this should be a states’ rights issue but as long as the federal government is involved we might as well pass loser pays until the federal government turns it back to the states. Gov. Rick Perry sounds better every day but for me the final jury is still out.

    • Jury is still out for me as well. I’m not overwhelmed by any of the candidates thus far. I love Herman Cain, but apparently he’s a non-starter.

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