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In Texas, it's not 'loser pays,' but it's still pretty good

Angry charges, procedural maneuvering and threat of a walkout by Democratic lawmakers lent drama to the Texas House's consideration of tort reform legislation Saturday and the bill's ultimate passage Monday.HB 274 bill history, text) passed by a vote of 96-49.

As Ted indicated below, the original “loser pays” proposition has been watered down substantially into procedural reforms. The Austin American Statesman’s report is good on the legislative substance:

As originally introduced, the bill would have created a true loser pays system — lawsuit losers would have to pay the other side's court costs and lawyer fees.

But House Bill 274 was changed in committee to assess legal fees against somebody who files a lawsuit that is tossed out under a so-called motion to dismiss for failing to state a valid legal claim.

Texas is among eight states that do not allow motions to dismiss before evidence is presented in civil court, and the bill would direct the Texas Supreme Court to adopt rules creating that option.

It IS progress. Texas Gov. Rick Perry issued a statement: "I applaud the House and Rep. Brandon Creighton's leadership for moving Texas one step closer to implementing a loser pays system that will help expedite legitimate legal claims and crack down on junk lawsuits. This legislation will also protect Texas jobs and stimulate economic opportunity by relieving Texans and employers of the costs and burdens created by frivolous and drawn-out lawsuits. I encourage the Senate to quickly take action on this important legislation." Earlier …

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.