Lawsuit abuse bill passes House committee
WASHINGTON (Legal Newsline) - The House Judiciary Committee on Thursday approved legislation aimed at reducing frivolous lawsuits and improving attorney accountability.
The committee passed HR 966, the Lawsuit Abuse Reduction Act or LARA, by a vote of 20-13.
According to the bill's text, the legislation amends the sanctions provisions in Rule 11 of the Federal Rules of Civil Procedure to require the court to impose an appropriate sanction on any attorney, law firm or party that has violated, or is responsible for the violation of, the rule with regard to representations to the court. It also requires any sanction to compensate parties injured by the conduct in question.
The measure also removes a provision that prohibits filing a motion for sanctions if the challenged paper, claim, defense, contention or denial is withdrawn or appropriately corrected within 21 days after service or within another time the court sets.
HR 966 also authorizes the court to impose additional sanctions, including striking the pleadings, dismissing the suit, nonmonetary directives or penalty payments if warranted for effective deterrence.
In 1993, federal rules mandating sanctions for frivolous suits were watered down, resulting in the current crisis of widespread lawsuit abuse, the judicial committee explained.
LARA restores accountability for attorneys by reinstating monetary sanctions against lawyers who file frivolous lawsuits, House Judiciary Chairman Lamar Smith said in a statement.
"Lawsuit abuse has become too common in American society partly because the lawyers who bring these cases have everything to gain and nothing to lose," said Smith, who filed the bill.
"Plaintiffs' lawyers can file frivolous suits, no matter how absurd the claims, without any penalty. Meanwhile defendants are faced with the choice of years of litigation, high court costs and attorneys' fees or a settlement. Many of these cases have cost innocent people and business owners their reputations and hundreds of thousands of dollars."
The Texas Republican added, "The Lawsuit Abuse Reduction Act restores accountability to our legal system by reinstating mandatory sanctions for attorneys who file meritless suits. Though LARA will not stop all lawsuit abuse, it encourages attorneys to think twice before filing a frivolous lawsuit."
The American Association for Justice, a trial lawyers lobbying group, argues that the measure is a favor to big corporations and undermines the rights of American workers and consumers.
"This bill imposes rules that were in place from 1983 to 1993, which judges and legal scholars ruled a complete failure," AAJ President Gibson Vance said in a statement.
"With this legislation, Congress forces our courts to turn back the clock to a rule that did not work and that judges themselves have found to be unnecessary and ineffective."
The AAJ says Rule 11, as it is currently written, gives judges the flexibility to determine when to enforce sanctions against attorneys who file lawsuits containing errors or for improper purposes.
It contends HR 966 would take away that flexibility, replacing the discretion of federal court judges with congressionally-mandated rules that were previously tested and found to be "a complete failure."
The American Bar Association, Judicial Conference of the United States and a coalition of consumer groups all have written letters to Congress opposing the legislation.
From Legal Newsline: Reach Jessica Karmasek by e-mail at email@example.com.
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