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2011-09-02 Home Front: Politix

Perry's 'loser pays' is an economic winner

Mr. Perry made passage of a modified version of the English loser-pays rule a top priority during this year's biennial session of the Texas Legislature. After emphasizing the need for such tort reform during his State of the State address in February, Mr. Perry made loser pays the law of the land in Texas by signing H.B. 274 in May.

This is not the first time Mr. Perry has tackled necessary pro-growth tort reform. The implementation of loser pays in Texas comes on the heels of Mr. Perry's landmark 2003 medical liability reforms, which established a burden of proof for punitive damages similar to criminal law by requiring a unanimous jury verdict and capped noneconomic damages at $750,000. A 2008 report by the Perryman Group found those reforms to be directly responsible for an immediate first-year influx of almost 2,000 new physicians into Texas as well as a 70 percent drop in lawsuits against hospitals. The Texas Public Policy Foundation estimates that the state has netted more than 25,000 doctors since. Following the 2003 reforms, Texas doctors saw medical liability insurance rates decline by an average of more than 21 percent, with some seeing nearly a 50 percent rate cut. Those savings enabled hospitals to expand charity care by 24 percent. Three years after these lawsuit reforms, Texas became the first state ever to be removed from the American Medical Association's list of states experiencing a liability crisis.
And 25,000 Trial Lawyers moved to California

Posted by GolfBravoUSMC 2011-09-02 11:31|| || Front Page|| [18 views ] Top

#1 Texas became the first state ever to be removed from the American Medical Associations list of states experiencing a liability crisis.

The other side of the coin is - has Texas implemented a robust medical review board to insure that truly incompetent and reckless practitioners have their licenses removed? By robust, I mean effective and prompt with integrity that isn't a good old boy rubber stamp protecting their own type organization. The much abused tort approach has been thriving because of the perception that there was no other means of redress when wrong was done.

Posted by Procopius2k 2011-09-02 12:21|| 2011-09-02 12:21|| Front Page Top

#2 I'd have to see the legislation, but it seems a bit simplistic and knee-jerk sensationalistic. Does it apply to all cases? If not, why not? Most cases are are not even civil cases; so, for example, why not make the losing criminal pay for the court costs? [snark]Can't imagine the government ever abusing that kind of system.[/snark] Most court cases are not malpractice, negligence, or even motor vehicle personal injury cases.

If there's a custody dispute, you're going to make the loser (who just lost child custody or visitation, e.g.) pay? Those kind of practices applied to domestic relations, criminal law, and other fundamental areas start getting into some potentially very serious constitutional issues regarding basic civil rights and access to the courts . . .

For the main trial courts of one state, here's how the workload broke down for a recent year:

Court Filings:
2% Mental Health
5% Probate
13% Juvenile
15% Domestic Relations
16% Criminal
49% Civil

Trials:
17% Juvenile
31% Civil
51% Criminal

CIVIL BREAKDOWN
4% Breach of Contract
<1% Breach of Warranty
<1% County Court Counter Claim
<1% Confirmation of Arbitration Award
1% County Court of Municipal Appeal
<1% Declaratory Judgment
<1% Determination of Interests
39% Distraint Warrant
1% Foreclosure (not Deed of Trust)
1% Forcible Entry and Detainer
<1% Foreign Judgment
<1% Fraud
<1% Goods Sold and Delivered
1% Injunctive Relief
<1% Landlord Tenant
<1% Lien
<1% Malpractice
<1% Mechanics Lien
6% Money
<1% Motion to Approve Transfer of Structured Settlement
<1% Name Change
1% Negligence
1% Note
1% Other
<1% Out of State Subpoena
1% Personal Injury
3% Personal Injury - Motor Vehicle
3% Petition to Seal Criminal Record
<1% Petition to Seal Criminal Conviction
<1% Possession
<1% Prohibition
<1% Property Damage
<1% Public Nuisance
<1% Public Utilities
1% Replevin
<1% Restraining Order
<1% Review - Other Local Government/Person
<1% Quiet Title
<1% Writs/Contempt
34% Deed of Trust
<1% Services Rendered
<1% Sexual Harassment
<1% Special District
<1% Specific Performance
<1% Wages
<1% Workman's Compensation
<1% Writ of Habeas Corpus
<1% Wrongful Death
<1% Wrongful Death - Motor Vehicle

Most civil cases relate to taxes and land issues. The next biggest area is commercial litigation.

I think creative solutions and a balanced approach make for better dispute resolution. "Tort reform" is just insurance company profit protection via political cronyism and master bloviation.

Posted by cingold 2011-09-02 13:18|| 2011-09-02 13:18|| Front Page Top

#3 If there's a custody dispute, you're going to make the loser (who just lost child custody or visitation, e.g.) pay?

Sure - it's called Child Support.

Posted by CrazyFool 2011-09-02 14:01|| 2011-09-02 14:01|| Front Page Top

#4 Most likely the trial lawyers will file more cases in the federal courts rather than the state courts in Texas to counter the loser pays problem.

Posted by JohnQC 2011-09-02 14:18|| 2011-09-02 14:18|| Front Page Top

#5 Texas used to be a plaintiffs' jurisdiction. Think people like John Edwards. Now the trial lawyers are leaving and more doctors are moving to in. What's not to like?

Posted by Iblis 2011-09-02 15:16|| 2011-09-02 15:16|| Front Page Top

#6 The loser pays plan is to reduce frivolous lawsuits and law suits brought as extortion. If a law suit is filed with the sole intention of getting a company or corporation to file out of court, this option stops that. In California, many architects and engineers settle cases of "design liability" out of court even knowing that the case was winnable if the architect or engineer had the funds to mount a credible defense (which most of them do not).

In California, many small businesses are hijacked by frivolous lawsuits over improper signage or handicapped accessibility issues. The state legislature in California has passed so many odd business regulations, it is almost impossible to keep track of them.

The fact that there are more lawyers in California than doctors makes having any type of business a risky proposition.

Posted by Bill Clinton 2011-09-02 15:17|| 2011-09-02 15:17|| Front Page Top

#7 In Florida, men have to pay for litigation entered by their divorcing wives. Some have to apply for a bridge-loan every month, and suffer liens on property. If they can't get loans or liquidate property, then are bankrupted. Then their credit is screwed and they have to submit to default proceedings.

Posted by chickena 2011-09-02 16:16|| 2011-09-02 16:16|| Front Page Top

#8 Does it apply to all cases? If not, why not?

Perfect is an enemy of good. Any society what loses sight of this simple principle is already dead.

Posted by g(r)omgoru 2011-09-02 16:30|| 2011-09-02 16:30|| Front Page Top

#9 Rule 11 (Federal and, probably, also in every state's Rules of Civil Procedure) already severely punishes the filing of frivolous lawsuits. Rule 11 already allows for fee and cost shifting in the case of a frivolous law suit.

So, why "tort reform"? "Tort reform" is just insurance company profit protection via political cronyism and master bloviation.

Bear in mind the basic premises of Signal Detection Theory. To the extent you seek to eliminate False Positives, you will necessarily increase False Negatives. The insurance companies know this, and are using a "Tort Reform" strategy to game conservatives into increasing insurance company profits. Better, I say, to have a hundred losing (but not frivolous) cases, than that one truly injured person is denied justice and their day in court.

On the other hand, if the case is frivolous, use Rule 11 and fry the bastards!

Posted by cingold 2011-09-02 18:53|| 2011-09-02 18:53|| Front Page Top

#10 So, why "tort reform"? "Tort reform" is just insurance company profit protection via political cronyism and master bloviation.

Profit Protection? They just pass costs, in this case insurance rates increase, on to the insured who in turn pass the costs on to the consumer.

Posted by Procopius2k 2011-09-02 21:21|| 2011-09-02 21:21|| Front Page Top

#11 Cingold, that would work if the judges actually used Rule 11. Unfortunately they rarely do.

Posted by Barbara 2011-09-02 21:24|| 2011-09-02 21:24|| Front Page Top

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