'Loser pays' becomes law in Texas

Jessica M. Karmasek May 31, 2011, 11:22am


AUSTIN, Texas (Legal Newsline) - Texas Gov. Rick Perry on Monday signed lawsuit reform legislation that will implement a loser-pays system for frivolous lawsuits filed in the state.

The governor had designated the issue as an emergency item during this legislative session.

"House Bill 274 provides defendants and judges with a variety of tools that will cut down on frivolous claims in Texas," Perry said in a statement.

"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."

HB 274 implements several measures to streamline and lower the cost of litigation in Texas courts, allowing parties to resolve disputes more quickly, more fairly and less expensively, the governor explained. This includes:

- Allowing a trial court to dismiss a frivolous lawsuit immediately if there is no basis in law or fact for the lawsuit;

- Allowing a trial judge to send a question of law directly to the appellate court without requiring all parties to agree if a ruling by a court of appeals could decide the case;

- Allowing plaintiffs seeking less than $100,000 to request an expedited civil action; and

- Encouraging the timely settlement of disputes and helping prevent a party from extending litigation by seeking a "home run" if they have already been offered a fair settlement.

At the signing Monday, the governor was accompanied by state Rep. Brandon Creighton, R-District 16, and state Sen. Joan Huffman, R-District 17.

"HB 274 signifies a major landmark for tort reform in Texas," Creighton, who helped write the bill, said in a statement.

"I am pleased with the outcome and am positive that this bill, now signed into law by Governor Perry, will make litigation in Texas fair, expedient, and affordable -- helping to create jobs, make plaintiffs whole and protect defendants from meritless cases."

Huffman, who sponsored the bill, agreed.

"Texas remains a national leader of tort reform with the signing of HB 274. The legislation curtails the frivolous lawsuits that can harm individuals and small businesses and fosters a more efficient and accessible court system for all parties," she said in a statement.

From Legal Newsline: Reach Jessica Karmasek by e-mail at jessica@legalnewsline.com.

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