Texas Tort Reform: Loser Pays Legislation Adds Insult to Injury

As an addition to the tort reform legislation passed in Texas in 2003, the state’s government is now in the process of implementing a “loser pays” law, which is one of the most contentious recent developments to fall under the umbrella of tort reform. In such a system, the loser of a lawsuit is made to pay the legal fees of the winner. Such a move would discourage average citizens from bringing lawsuits against potential defendants (often corporations) whose pockets are many times deeper than their own, out of fear they will have to pick up the defense’s costly tab. This would create an environment in which everyday people would be intimidated out of holding negligent doctors, manufacturers, premises managers, or pharmaceutical companies accountable for wrongdoing.

At first glance, a “loser pays” system may appear reasonable, but upon closer inspection it is anything but. Corporate interests and financial powers recognize that such a system is designed to tip the scales of justice in favor of those with the biggest pocketbooks. Under a “loser pays” system, landmark verdicts might never have been reached. Would an individual have ever been able to sue a government, arguing that schools should be desegregated? Surely in 1952 no one could risk the possibility of losing both the case and their life savings fighting for a cause they believed to be just and worthy. Access to justice is a bedrock principle of our American Constitution, and making the process more expensive and more intimidating to the powerless runs contrary to the goals of our founding fathers.

The Texas House of Representatives has already passed a “loser pays” law and the bill is currently under review by its state senate. It is expected to pass without much trouble. Politicians pushing for tort reform claimed that these policy changes would lead to lower healthcare premiums and a greater number of doctors due to reduced threats of potentially damaging medical malpractice claims. A recent study found this is not the case.

Sam Baker of The Hill writes, “The liberal advocacy group Public Citizen said Wednesday [October 12] that since [Texas] signed tort reform into law in 2003, the state hasn’t added new doctors as quickly as its overall population has grown [and that] insurance premiums there have risen faster than the national average.”

Echoing these sentiments is University of Texas Law School Professor Charles M. Silver, who wrote in an insightful column in the Texas Tribune tackling, among other things, medical malpractice issues, “In 2002, Texas had 61 fewer DPC [direct patient care] physicians per 100,000 residents than the average state. In 2010, Texas lagged the average state by a whopping 76.5 doctors per 100,000 residents, according to data published by the American Medical Association (AMA).” He goes on to explain that the Texas Department of State Health Services has been spinning the data to mask the grave consequences of Texas’ tort reform and make it sound far more effective than it has actually been. He writes, “They are blatantly exploiting the ignorance of people who have better things to do than read up on the number of doctors in the State.”

More ambivalent than Silver’s staunchly anti-tort reform article is one that appeared in The Economist under the headline, “Tort Reform: Sorry, Losers.” In it, the writer acknowledges the potential economic benefits of tort reform, but still favors the average citizen’s right to file suit in civil court. The article closes:

“But even if tort reform could save the country several billion dollars a year, that is still just a sliver of overall health spending. It may be that tort reform is most valuable as a signaling device. It shows that a state cares about business. That would go some way to explaining why tort reform is such a priority for crusading fiscal conservatives. Frivolous lawsuits are, along with criminal aliens and fraudulent voters, a bit of a bogeyman. They do exist, but are hardly as ubiquitous as the thundering rhetoric would suggest.”

“Loser pays” legislation can do nothing but hurt the average person in America who has suffered an injury due to the negligence of another. We have seen thousands of cases in our many years of experience where babies have suffered brain injury due to medical negligence, blue collar workers have lost limbs because of faulty machinery, construction injury occurs as the result of defective equipment, and spinal injury has occurred due to faulty seat belts or defective tires. These are just some of the types of cases for which we have recovered substantial verdicts on behalf of our clients that they may never have pursued had they been concerned with “loser pays” legislation.