Legal Newsline

Tuesday, August 20, 2019

House panel approves bill aimed at reducing frivolous lawsuits

By Jessica M. Karmasek | Sep 12, 2013

WASHINGTON (Legal Newsline) -- The U.S. House Judiciary Committee on Tuesday approved a bill aimed at reducing the number of frivolous lawsuits plaguing the nation's legal system.

The bill, called the Lawsuit Abuse Reduction Act or House Resolution 2655, passed by a vote of 17-10.

The legislation now heads to the floor for a full vote by the House of Representatives.

"Lawsuit abuse is common in America because the lawyers who bring these frivolous cases have everything to gain and nothing to lose. Lawyers can file meritless lawsuits, and defendants are faced with the choice of years of litigation, high court costs and attorneys' fees or a settlement out of court. This is legalized extortion," U.S. Rep. Lamar Smith, R-Texas and chief sponsor of the bill, said in a statement Tuesday.

"The Lawsuit Abuse Reduction Act restores accountability to our legal system by imposing mandatory sanctions on attorneys who file worthless lawsuits. LARA encourages attorneys to think twice before filing frivolous lawsuits."

Introduced in July, LARA imposes mandatory sanctions on lawyers who file meritless suits in federal court.

Specifically, the bill:

- Reinstates sanctions for the violation of Rule 11. Rule 11 of the Federal Rules of Civil Procedure was originally intended to deter frivolous lawsuits by sanctioning the offending party;

- Ensures that judges impose monetary sanctions against lawyers who file frivolous lawsuits, including the attorney's fees and costs incurred by the victim of the frivolous lawsuit; and

- Reverses the 1993 amendments to Rule 11 that allow parties and their attorneys to avoid sanctions for making frivolous claims by withdrawing them within 21 days after a motion for sanctions has been served.

Smith argues the billions of dollars wasted on the nuisance lawsuits force individuals and businesses to spend thousands of dollars on litigation, ultimately costing jobs and damaging the economy.

According to his office, the annual direct cost of American tort litigation exceeds $250 billion.

But critics of the legislation argue that it will end up slowing litigation and increasing its costs by encouraging additional legal maneuvers and requiring unnecessary court orders.

Christine Hines, consumer and civil justice counsel for Public Citizen, said in a statement Tuesday that LARA is a "flawed bill."

"In practice, this legislation would harm ordinary people with valid and important claims," she said. "It is just another backdoor tactic employed by corporate lobbyists and their allies in Congress to make it difficult for consumers and employees to hold corporations accountable."

In July, Public Citizen and other public interest organizations sent a letter to U.S. Rep. Bob Goodlatte, R-Va. and who chairs the House Judiciary Committee, opposing the bill.

"The judiciary, as well as consumer, employment and civil rights groups, oppose H.R. 2655 because history shows that it would harm the legal system and impair individuals' access to justice," Hines said.

"The House should learn from the past and reject this abusive measure."

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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