According to a story on the Legalnewsline.com, two congressmen have introduced a new tort reform bill in Washington. Representative Lamar Smith, R-Texas and Senator Chuck Grassley, R-Iowa, have introduced the so-called “Lawsuit Abuse Reduction Act of 2011”. As reported in the previous article, there are no studies showing that there is a lawsuit abuse (ie. frivolous lawsuit) problem, but that has not stopped these two Congressmen from charging forward with their bill.
Smith was quoted as saying, “(l)awsuit abuse has become too common in American society, partly because the lawyers who bring these cases have everything to gain and nothing to lose”. That statement is wrong, lawyers fund lawsuits for plaintiffs and do not fund lawsuits that are frivolous, because they will not get their money back. Smith goes on to say that, “(p)laintiffs lawyers can file frivolous suits, no matter how absurd the claims, without any penalty”. As I said, the penalty is the lawyer loses the money he put into the lawsuit. Getting a lawsuit off the ground can be a substantial endevor, and taking a case to trial costs serious money. If lawyers take frivolous cases they will go broke. Smith continues, “(m)eanwhile, defendants are faced with the choice of years of litigation, high court costs and attorneys fees or a settlement. Our legal system encourages frivolous lawsuits while defendants are left paying the price even when they are innocent”.
The bill would require mandatory sanctions, under the Federal Rules, for lawyers who file lawsuits with no basis in Federal Court. According to the article, the proposal “reinstates mandatory sanctions for attorneys who file meritless suits and forces them to pay the defendant’s attorneys fees and court costs. It also reverses a 1993 amendment that allowed 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”. Similar to the bill in Texas, reported below, the measure does not require sanctions for defendants who pursue meritless defenses. The bill appears to be another solution to a non-problem.