HolyCoast: Perry Scares the Trial Lawyers

Thursday, September 08, 2011

Perry Scares the Trial Lawyers

Kurt Schlichter has a piece in the Washington Examiner about some of the tort reforms Perry has already enacted in Texas and could take national as president:
For GOP pols, tort reform is a stump speech perennial. Yet, like the weather, Republicans always talk about tort reform but never do anything about it.

But lawyers who annually siphon billions from the economy know that Perry is just crazy enough to actually push it through because he already has.

Perry enacted medical malpractice reform in Texas, slashing payouts from bogus lawsuits. As a result, the doctors who left after being fleeced in the Lone Star State are flooding back by the thousands.

Then he signed a "loser pays" law letting prevailing parties recover their attorneys' fees. "Loser pays" rips the guts out of the extortion model of litigation that has made trial lawyers so rich.

The traditional rule is that each side bears its own attorneys' fees -- and it's no fun explaining to a small (or large) business client that there is no way to recover the money they paid me to beat a frivolous lawsuit.

Perry's "loser pays" reform turns that paradigm on its head. Plaintiffs' lawyers usually end up fronting thousands in litigation costs for their clients, while taking no fees unless they recover money -- usually 33 percent to 50 percent of the haul.

Litigants who are not paying their own freight have little incentive not to sue on weak cases. They have no skin in the game. But the idea that at the end of trial a winning defendant might present them with a hefty bill concentrates their minds wonderfully.

The dirty secret is that without "loser pays," defending even meritless lawsuits is so expensive that it is often easier to pay off a bogus claimant than litigate.

Combined with judges and juries who see the law as a way to redistribute the wealth, it's understandable why so many defendants choose flight over fight.
Read the whole thing. Kurt's a lawyer so he knows a thing or two about this stuff.

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