More on Texas’s New Loser-pays Law
July 9, 2011
A couple of weeks ago, I was surprised and pleased to learn that Texas had adopted a “loser pays” reform of their legal system—surprised because such a reform is basically good for everyone else but bad for lawyers, and I figured that lawyers would never let it happen. In the comments on that entry, we discussed the pros and cons of different possible variations on loser-pays laws.
National Review (July 4th, page 10) now gives us some details about the particular law Texas has passed; it’s a modest change to the system, impeccably sensible:
The state of Texas continues to wage war upon the plaintiffs’ bar: It has adopted a “loser pays” provision to discourage frivolous lawsuits. The lawyers howled about injustice, but the provision is narrowly tailored: If a plaintiff loses a motion to dismiss his claims, then he is responsible for the other side’s legal expenses. Which is to say, the loser pays only if his lawsuit is dismissed out of hand; if a case proceeds to full litigation, the provision does not apply.
The National Review editors also note that Texas has really bucked the structural problem I feared (that a government run by lawyers would not enact structural reforms against lawyers’ interests, and America would be ratcheted further and further in a pro-lawyer direction):
Under Gov. Rick Perry and a conservative legislature, Texas has insistently pushed back against the trial lawyers, most notably by capping non-economic damages in medical-malpractice cases and establishing a process to screen out meritless cases before they go to court. Texas’s legislature contains a greater proportion of lawyers than any other state in the country, but even the lawyers understand that unwarranted lawsuits can be a substantial drag on the economy, particularly on small businesses, and that the tort system can be a source of injustice as well as a source of justice.