Governors of Texas, South Carolina sign tort reform into law

Jessica M. Karmasek Jul. 27, 2011, 2:38pm


AUSTIN, Texas (Legal Newsline) - Texas Gov. Rick Perry was in Houston Wednesday for the ceremonial signing of a new law that will implement a loser-pays system for frivolous lawsuits filed in the state.

According to The Associated Press, Perry was joined by area Republicans in touting the new law.

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 in May.

"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.

The new law goes into effect Sept. 1.

Perry, a Republican, is considering a run for the White House in 2012. He is expected to make a final decision next month.

On Tuesday, South Carolina Gov. Nikki Haley signed her state's own tort reform legislation into law.

After passing the state House of Representatives by a bipartisan vote of 100-7, being gutted by the Senate Judiciary Committee and then held up on the Senate calendar for months, HB 3375 finally passed the South Carolina Senate in June by a vote of 39-0.

The new law caps punitive damages that are greater than $500,000 or three times the compensatory damages awarded.

Under the law, if it is found that the defendant is motivated primarily by financial gain, or the defendant's actions rise to the level of felony charges, then the award can be increased to the greater of $2 million or four times compensatory damages.

If it is proven the defendant intended to harm the claimant, was convicted of a felony arising out of the same act or acted under the influence of drugs or alcohol, there is no cap for punitive damages.

In addition, the new law includes an appeals bond cap, revisions to the statute of repose for construction cases and requires the state attorney general to approve civil actions by circuit court

From Legal Newsline: Reach Jessica Karmasek by email at

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