5/30/2011 10:32 AM
Gov. Rick Perry today signed HB 274, the omnibus tort reform bill sometimes called “loser pays.” It takes effect Sept. 1 this year.
He cited a study from the Bureau of Labor Statistics showing that Texas is leading the nation in job creation over the last ten years – having created over 700,000, while no other state had created more than 100,000 in that time. He attributed that success to tort reform. But improvements can still be made to the system, he said.
Under HB 274, authored by Brandon Creighton (R-Conroe) in the House and sponsored by Joan Huffman (R-Houston) in the Senate, if a motion to dismiss is brought early in a case, the loser of that motion would have to pay the attorney fees that the prevailing party had accumulated up to that point in the suit.
The bill tightens up language to encourage more offers of settlement, Huffman told LSR following Senate passage.
But when both parties are determined to slug it out in trial, they will both pay their own attorney fees as per current law, Huffman said.
The bill requires the Supreme Court to promulgate rules on motions to dismiss early in a lawsuit. Either party could move to dismiss if they believed the suit had no basis in law or fact. Attorney fees would be awarded only in cases that a judge found were not based on “law or fact.”
Perry said the reforms will allow business leaders to spend less time in court and more time creating jobs.
Creighton said he was “more than pleased with the outcome” of the bill.
Huffman responded to critics who said the Senate’s unanimous passage of the bill means it must not be particularly strong. She observed that medical malpractice reform HB 4 from 2003, and other measures, have passed either unanimously or with strong majorities.