After the Texas senate unanimously voted last week to adopt "loser pays" tort-reform legislation, the Texas house passed the measure on Wednesday. Governor Rick Perry, who reportedly supported the measure from its beginning, signed the legislation on Monday night.
That legislation, celebrated as a victory for small businesses statewide, will require a plaintiff to pay a winning defendant's legal expenses if a judge determines that their complaint is without grounds. The legislation will affect a number of types of cases, including medical malpractice suits.
The law builds on legal reforms back in 2003 and 2005 which aimed at preventing frivolous lawsuits. In addition to requiring some losing civil plaintiffs to pay their opponents legal costs, the law allows for expedited civil actions in cases where there is less than $100,000 in controversy. The law also allows judges to dismiss lawsuits early on in the litigation process if they are without merit.
Supporters of the measure say it will allow the legal system to be more effective, lowers litigation costs, and allow parties to resolve their disputes more quickly. They also say it will positively influence job creation in Texas.
Governor Perry said about the new law, "This important legislation will help make Texas that much more attractive to employers seeking to expand or relocate from countries all over the world by allowing them to spend less time in court and more time creating jobs."
Opponents of the law say it will give corporations more power in the litigation process and will prevent legitimate claims from making it to court. Trial lawyer groups and businesses opted to support the Senate version of the bill once the provision allowing immediate dismissal of frivolous lawsuits was added.
Source: Southeast Texas Record, "Perry signs 'loser pays' lawsuit reform into law," Marilyn Tennissen, 30 May 2011.
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