Texas Watch Speaks Out Against HB 274

Texas Watch Testifies Against "Loser Pays" in Senate State AffairsYesterday, Texas Watch Director of Legislative Affairs Ware Wendell gave impassioned testimony to the Senate State Affairs Committee against HB 274.  He talked about the devastating impact this bill would have on Texans of all walks of life – children, first responders, small business owners, and many more.  He told the committee that this bill gives immunity to polluters, insurance companies, and other corporate wrongdoers by threatening families and businesses with having to pay the bloated legal costs of corporate defendants even if they win in court.  Watch Ware’s testimony. Building Coalitions to Fight "Loser Pays"Texas Watch organized a coalition of more than a dozen advocacy groups representing varied interests and constituencies, from Mothers Against Drunk Driving to the Coalition of Texans with Disabilities, to oppose HB 274, the so-called “loser pays” bill.  In a memo to the Senate State Affairs committee, the coalition wrote that “HB 274 has broad implications that devastate the legal rights of Texans of all walks of life.”  The coalition closes its memo by arguing that “Texans who have been harmed should not have to choose between their financial security and justice.”Take Action - Tell the Senate to Turn Back "Loser Pays"Take action today using our online Action Center to contact your Senator.  Do your part.  Let them know the dangers this legislation poses for Texas families and small businesses.  The special interest and corporate lobbyists call this “loser pays,” but really it is “families pay” because only individuals and small business owners – not corporate defendants – would be forced to pay. What’s worse is that you could see your life savings wiped out not only if you lose a valid lawsuit, but even if you just don’t win big enough. In other words, you can win… and still lose.  After you take action, be sure to tell your friends and family to do the same.Texas Watch Needs Your Help, Today!Click here https://texaswatch.ngpvanhost.com/ngpform/friends-fight-fundraising-campaign to make a contribution to help Texas Watch keep up the fight against lobby-driven proposals like “loser pays” that strip Texas families and small business owners of their constitutional rights and liberties.

Tort Deform - Houston Chronicle DeBunks HB 274

The following is an editorial appearing in the Houston Chronicle regarding HB274Tort deform
House Bill 274 further stacks the legal deck in favor of big-money defendantsHouston Chronicle Editorial, May 14, 2011The campaign by so-called tort reformers in Texas has long since moved beyond its avowed goal of preventing frivolous lawsuits and massive damage judgments. With the passage of HB 274 by the Texas House last weekend, it has graduated to an all-out assault on the ability of consumers and small business owners to seek legal redress in civil courts against powerful business interests. You might call the latest iteration "stealth tort reform." The primary damage isn't in what the bill adds to current law. The injustice is in what it eliminates.The last major tort reform legislation passed in 2003 in Austin mandated that plaintiffs who spurn settlement offers and win a jury verdict must receive a judgment award of at least 80 percent of the offer. Otherwise, they are responsible for paying legal fees for the losing defendant from the date they refuse the settlement offer. However, those fees could not exceed the amount of the judgment, so at worst the winner went home empty-handed.That existing provision is already a powerful weapon in the legal arsenal of deep-pocket defendants such as insurance companies and corporations, since plaintiffs would be tempted to accept low-ball settlements rather than risk receiving nothing. It's not fair, because winning plaintiffs in most tort cases cannot seek reimbursement of their legal fees, only much smaller court costs. The playing field is already sharply tilted in favor of the defendants.Not content with that advantage, the crafters of this bill have further stacked the deck. It removes limits on the legal fees a winning plaintiff could be forced to pay if they eschew a settlement offer and the judgment falls below that 80 percent margin. Rather than receive nothing, the winner could be tagged with the loser's huge legal fees. As Houston personal injury lawyer Steve Waldman puts it, "The moral of the story being told by the advocates of this bill is this: If you have a claim against a big corporation, take whatever it offers, because if you dare to take them to a jury, you risk your economic life."Florida implemented similar provisions, and the ensuing public outcry forced legislators to repeal it five years ago. We agree with Alex Winslow, executive director of the citizen advocacy group Texas Watch, that HB 274 "is designed to force families and small businesses with valid claims to weigh the possibility of paying the legal costs of insurance companies and multinational corporations [and] is at best detrimental to public accountability and at worst unconstitutional." The concept of making plaintiffs with valid cases potentially responsible for defendants' legal fees is a feature of British law that our nation's founders wisely rejected. It's a legal concept that should have no place in Texas courtrooms.It's hard to believe this legislation was designated by Gov. Rick Perry as an "emergency" to facilitate its already inevitable passage by the House GOP super majority during a raucous, Mother's Day eve session that ended in flaring tempers and abrupt adjournment. Perhaps the only emergency was the governor's need to placate his backers at Texans for Lawsuit Reform, a major contributor to GOP state legislators.*** See these other OP-Ed stories on HB274***Legislature loses its way with 'loser pays' blow-up
The Dallas Morning News Editorial, May 9, 2010'Loser pays' is false advertising
Houston Chronicle, May 10, 2011Why "Loser Pays" is a Loser
Texas Tribune, May 13, 2011

New Bill Will Hurt Victims of Drunk Drivers

Friends,The title to this post could not be more serious.  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 gives millions (potentially billions) to insurance companies by stripping away the rights of individuals and small businesses to bring a lawsuit when they have been injured or had an insurance claim wrongfully denied. Under this law, HB274, the victims of drunk drivers could have to pay the attorney’s fees of the drunk – even if the victim WINS at trial!Please forward this blog post to your contact list.  Post this on your Facebook pages.I am not making this up.  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.In a nutshell, here is how the law works: 1.‘Loser Pays’ means that who ever ‘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. 5.Since the insurance company will only hire the best, high priced lawyers, that bill could easily be six figures.  Now you owe the drunk driver $21,000Finally6.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. In Summary:A.If the injured person (or small business) 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.This is a call to action.  We can not 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.  They have enough power.  The insurance lobbyists have already RACED this law through the state house of representatives.  It has already passed the house. The Senate will take up debate on the bill this Monday, May 16, 2011.  Please call your state Senator now.  If you live in the Lufkin, Nacogdoches, or Jacksonville area, your Senator is Robert Nichols.  His contact numbers are:Senate District 3--Senator Robert NicholsCapitol Phone: (512) 463-0103Capitol Address: P.O. Box 12068, Capitol StationAustin, TX 78711District Address: 329 Neches StreetJacksonville TX 75766Phone: (903) 589-3003Senator Nichols’ fax number is 800-959-8633If you do not know who your state senator is, here is a link that lists every Texas State Senator and his or her contact information.http://www.fyi.legis.state.tx.us/district.aspx?DistType=SENATE&AllDistrict=on If you do not know your Representative, you can find him or her by typing in your address on this website. http://www.house.state.tx.us/members/find-your-representative/If you want more information, please feel free to call me directly.  I am also attaching a copy of the letter that I sent to Representative James White explaining exactly how dangerous and unfair this law is and asking him to reconsider his support of HB274. Sincerely, Mike Love***************************************************************Letter to Texas State Representative James WhiteMay 13, 2011Honorable James WhiteRoom E2.720, Texas State Capital                         Via Facsimile: (512) 463-9059P.O. Box 2910Austin, Texas 78768 Regarding: HB 274 Dear Representative White:  I am writing because I believe you have been seriously misled into supporting a very bad bill in HB274.  I cannot believe that you would support such a bill if you truly understood how bad it really is. Please, read this short letter.  I will explain the hidden ways this bill attacks the fundamental rights of those you represent. The “Loser Pay” label on this bill is a sham.  Choosing the ‘Loser Pay’ option can only be instituted by the defense.  Anytime the defense has a decent chance to win on liability, or made even a partial settlement offer, the insurance company can make the ‘loser pay’ election to put pressure on an injured victim or small business (car wreck victim making a claim for medical bills, or business owner making a flood, or storm claim). However, if the insurance company wants to delay, raise frivolous defenses, or give low ball offers on serious cases, the injured person or small business is denied the same basic right to make a ‘Loser Pay’ election.  It is fundamentally unfair to give one side this weapon and deny the same rights to the other.             HB274 gives this powerful weapon to multi-billion dollar insurance companies like AIG, Allstate, and State Farm but denies these same rights to working families, children, and victims of drunk drivers.  This is indefensible. Even If the Injured Person or Small Business Wins, They Can Still Lose: Under the current version of the bill, if the injured person or small business making  a claim wins at trial but does not win more than 80% of the insurance company’s pre-trial settlement offer, the victim can be ordered to pay the insurance company’s high priced lawyers, expert witness fees, and court costs.  This means that if a person with a valid claim fails to win enough at trial, they can actually end up with a judgment against them to pay for the insurance companies’ lawyers and experts. Exposing the Shell Game: Under HB274 the Insurance Company Never Pays the Victim’s Attorneys Fees, Even When the Defense Loses.  This law not only denies injured victims the same right to elect ‘Loser Pays’ as defendants, it is rigged to make it impossible for the victim to ever recover attorney’s fees, even when the defense (insurance company) loses.  Promoting HB274 as ‘Loser Pays’ perpetrates an unwarranted deception against the citizens of Texas.  HB274 is not ‘Loser Pays’.  Under HB274, if the plaintiff loses, plaintiff pays.  If the plaintiff wins, but not enough, plaintiff pays.  But, if the defendant loses, nothing happens. Here is how HB274 perpetrates the final deception.  Section 38.016(a) of the law states “the prevailing party may recover the prevailing party’s litigation costs”.  However, section 38.016(d) states that attorney contingency fee agreements “may not be considered in the determination of the amount of reasonable and necessary attorneys fees.”  Only insurance companies and big business can afford to hire an attorney by the hour.  Accident victims and small businesses are forced to hire an attorney on a ‘contingency fee’ contract.  Therefore, big business and insurance companies can recover their attorneys fees but individuals and small businesses are denied the same right even if they win. Unless they are independently wealthy, every seriously injured accident victim, and every small business mistreated by an insurance company is dependant on an attorney who is willing to believe in them.  They are dependant on an attorney who cares enough to take their case and work (sometimes for years) without any money down, advancing all expenses with only the guarantee of ever being paid being that attorney’s confidence in the truthfulness of his client, and the legitimate nature of the claim.  The only time that the attorneys for both sides are paid by the hour is when one big business is suing another. Because virtually every injured person (or small business making a claim) is represented by an attorney with a contingency fee contract, HB274 denies these victims equal treatment under the law. This law stacks the deck in favor of big business and insurance companies and against individuals, families, victims, and small business.  HB274 goes beyond political gamesmanship.  It goes beyond favoritism and acceptable political payback to special interests.  This law attacks the fundamental principals and convictions that this country, and this state were founded upon.  That is: that every person, regardless of race, religion, creed, or status is entitled to equal treatment under the law.  I challenge any supporter of HB274 to identify just one example in history where unequal treatment of one class of persons against another has ever been found to be justified. I have only attempted to explain the most serious problems with HB274.  There are many other problems with every other aspect of the proposed law.  Other sections of the proposed law will: significantly increase the cost of litigation for all parties (plaintiffs and defendants), create a conflict of interest between clients and their attorneys (both plaintiffs and defendants) create significant delays in the court system and deny justice to many Texas citizens with valid claims. For these reasons, I respectfully urge you to reconsider your support of HB274.  I would be very interested to speak with you directly about this very serious issue and to talk personally about the concerns I have outlined above as well as other problems caused by HB274.  Of course, I would likewise be very interested in your thoughts on this matter.  You may contact me anytime day or night.  Office (936) 632-2000, email mikelove@texaslawoffice.com. Respectfully,Mike LoveAttorney at Law