Texas Business Attorney: Loser Pays!
Posted on | August 28, 2011 | No Comments
Texas Business Attorney: 2011 Tort Reform: Loser Pay takes effect September 1, 2011
In Rick Perry’s state of the union address back in February, he called for sweeping tort reform, most notably the “loser pays” component. He also addressed the need to have early dismissal for obviously frivolous lawsuits, expeditions of trial and limited discovery. The basis, Perry said, for the reform is to make the legal system more accessible to the “little guy”.
House Bill 274 was passed by both chambers and was signed into law on May 30, 2011. The provisions of the bill will be effective on September 1, 2011. H.B. 274 will apply to all civil actions commenced on or after September 1.
Below is a synopsis of H.B. 274:
- Early Dismissal of Claims—H.B. 274 provided that the Supreme Court of Texas must adopt rules regarding dismissal of certain causes of action that “have no basis in law or fact on motion and without evidence. The rules shall provide that the motion to dismiss shall be granted or denied within 45 days of filing the motion.” Tex. H.B. 274, 82nd Leg., art. 1, § 1.01 (to be codified at Tex. Gov’t Code § 22.004(g)). However, the motion to dismiss does not apply to family law cases or for actions by or against government entities.
- Expedited Civil Actions—The Supreme Court is also required to adopt rules that will promote the “prompt, efficient, and cost-effective resolution of civil actions” in which the amou in controversy does not exceed $100.000.00. Tex. H.B. 274, 82nd Leg., art.2, § 2.01 (to be codified at Tex. Gov’t Code § 22.004(g)). The rules will concentrate on lowering discovery costs and procedures to expedite civil trials.
- Permissive Interlocutory Appeals—The Civil Practice and Remedies Code will be amended to authorize a trial court, either by its on motion or that of a party, to permit an appeal that is not otherwise appealable if the order “involves a controlling question of law as to which there is a substantial ground or difference of opinion” and “an immediate appeal from the order may materially advance the ultimate determination of the litigation.” Tex. H.B. 274, 82nd Leg., art. 3, § 3.01 (to be codified at Tex. Gov’t Code § 22.004(g)).
- Offer of Settlement Provisions—This section limits a party from recovering any litigation costs that total more than the total amount that the claimant either recovers or would recover before adding an award of litigation costs in favor of claimant, or subtracting as an offset an award of litigation costs in favor of defendant. Tex. H.B. 274, 82nd Leg., art. 4, § 4.01 (to be codified at Tex. Gov’t Code § 22.004(g)).” Additionally, “Reasonable deposition costs” have been included in the definition of “legal costs.”
- Designation of Responsible Third Parties—A claimant may not designate a responsible third party if the defendant has failed to comply with its obligations to timely disclose that the person may be designated as a responsible third party under the Texas Rules of Civil Procedure. Tex. H.B. 274, 82nd Leg., art. 4, § 4.01 (to be codified at Tex. Gov’t Code § 22.004(g)).
How the implications of H.B. 274 will effect civil litigation is yet to be seen. Unfortunately, the “loser pay” component may have the opposite effect that Governor Perry was hoping for when he made his inaugural address. Instead of creating more access to the legal system, it may stifle the “little guys” availability to sue. Specifically, individuals or small business owners may be fearful to file suit because of the danger of paying attorneys fees if the suit is not successful.
For questions on Texas business law contact The Wright Firm, L.L.P. at 972-353-4600 or visit our website at www.thewrightlawyers.com.
Tags: Dallas Business Attorney > Dallas Business Lawyer > Denton Business Lawyer > Denton Employment Lawyer > H.B. 274 > Lewisville Business Attorney > Lewisville Business Lawyer > loser pays > texas business attorney > Texas Business Law > texas tort reform > The Wright Firm
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