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Texans: Fight for your Right to Trial

May 17, 2011

I got an email today from a lawyer friend, telling me about some legislation I haven’t been paying attention to: the up-and-coming “Loser Pays” law.  This Texas Tribune article gives the basics, and it sounds good. If you win a court case, you should recap the cost of attourney’s fees, right?

My friend explained it better. In short, loser pays only if you’re the loser:

Whatever your political affiliation, our Founding Fathers believed that the right to trial by jury was every bit as important to liberty as the right to vote because it puts justice in the hands of the people and not in the hands of the powerful money interests.

 At a time when our state legislature should be working to address our state budget crisis, they are instead preparing to pass a new law that literally strips away the rights of individuals and small businesses to bring a lawsuit. 

 The effect of this new law is simple: 

 A.              If the injured person (or small business) files a lawsuit and loses, he/it will have to pay the insurance company’s attorneys fees, expert witnesses, court costs etc. 

B.               If the injured person (or small business) wins, but does not win more than 80% of the settlement offer, he/it will still have to pay the insurance company’s attorney’s fees, etc. (which could be more than he was awarded by the jury on his claim).  I.e. the victim wins but still loses,

C.              If the injured person (or small business) wins more than 80% of the insurance company’s settlement offer he is the ‘prevailing party.’ However, because HB274 will not let a ‘contingency fee’ contract be considered as evidence of attorneys fees, the insurance company never has to pay the victims attorneys fees even when the defense loses.

 They are calling the bill “Loser Pays” but that name is a sham.  The law is worded to guarantee that the insurance company wins no matter what.

 Under this law, HB274, the victim of a drunk driver could have to pay the attorney’s fees of the drunkeven if the victim WINS at trial!

 In a nutshell, here is how the law works: 

 1.     ‘Loser Pays’ means that whoever ‘loses’ a lawsuit pays the other guy’s attorney’s fees and costs.  (right now each side pays their own)

 2.     However, ‘Loser Pays’ is not automatic.  Under the proposed law, only the insurance company gets decide if ‘Loser Pay’ applies.

 3.     Even Worse, ‘Loser’ does not mean what you think it means under this law.  Assume a drunk driver runs over you and your child.  Assume that your damages are $150,000 in medical bills and lost wages but the insurance company only offers $100,000.  You decide to go to trial.  Unfortunately, the insurance defense attorney is really good and he convinces the jury the accident was partially your fault (for not ‘watching out’ for the drunk as much as you should have) and he also convinces the jury not to give you all of your lost wages because ‘you should have gone back to work sooner’ instead of taking care of your injured child at home.  Still, even with all that, you win and the jury awards you $79,000.00.  YOU JUST LOST UNDER THIS NEW LAW! 

 4.     Because you only won 79% of the insurance company’s settlement offer, HB274 says you LOST, and YOU HAVE TO PAY THE INSURANCE COMPANIES ATTORNEY’S FEES, TRAVEL EXPENSES, EXPERT WITNESS FEES, AND COURT COSTS.  This bill could easily be six figures.  Now you owe the drunk driver $21,000


 5.     Under this law, if the plaintiff wins big (i.e. more than what the insurance company offered to settle for) the insurance company still gets a free pass because the law also says that when awarding the attorneys fees to the winner, the court can not consider a contingency fee contract as evidence of attorney’s fees.  Only big business and insurance companies can afford to hire an attorney by the hour.  The only way an individual or small business can afford to hire an attorney is through a contingency fee contract. 

 This is a call to action.  We cannot allow special interests to pull off this kind of power grab that profits off the backs of regular folks.  Please take five minutes to call your state senator now! Let him or her know you are opposed to this law because it strips rights away from individuals, families, and small businesses, and gives all the power and advantages to big business and insurance companies. 

 To find out your State Senator’s contact information, click on the link below or cut & paste it into your address bar:

 The insurance lobbyists have already RACED this law through the state house of representatives.  It has already passed the house, but the Senate has yet to vote on this issue.  Please contact your State Senator today!

Here’s another quick hit from a local lawyer on facebook:

Call your Texas state Senator TODAY and let them know you oppose HB274 (aka “Loser Pays”). This bill is bad for Texas families and is only “loser pays” when the loser is YOU, not the insurance company. Another assault on Texans. Tell your Senator not to suport it.

I don’t often get up in arms about this sort of thing, but this is bullshit. I’m all in, and calling now.


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