Recent “Tort Reform” Developments in Texas

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by Jay Pate

The Texas Senate recently voted unanimously in favor of the “loser pays” tort reform bill, H.B .274.  As originally crafted by the House, the bill would have awarded attorney’s fees to defendants if they made an offer to settle which the plaintiff turned down and the jury returned with an award for the plaintiff for less than 80% of the initial settlement offer. 

Texas trial lawyers and consumer advocate groups fought hard against these measures. As a result, the version of the bill passed by the Texas Senate will not allow a defendant to recover litigation costs that total more than the plaintiff’s final jury award; this change means that plaintiffs cannot be forced to “come out of pocket” to pay the defense’s costs.  Another significant concession in the Senate version of the bill was to add a provision that will allow the plaintiff to collect fees as well, if they win a verdict that is more than 120% of the settlement offer.  On May 25, 2011, the House voted to accept the Senate’s changes, moving the Senate version of H.B. 274 closer to becoming law.

While the Senate version is certainly an improvement over that of the House, it is unfortunately just one more example of insurance companies and corporations restricting the rights of average Texans to receive fair compensation for injuries or wrongful death.   Even defense lawyers are growing fed-up with laws that continue to stack the deck against plaintiffs.  The president of the Texas Association of Defense Counsel (TADC), Keith O’Connell, admitted as much: “There comes a time where tort reform becomes so Draconian that it’s not fair or good for anybody.  [I]t’s not fair, it’s not going to work and it will collapse on itself.”

Since 1995, the percentage of people living in Texas has increased nearly 35%. During the same time, the number of injury lawsuits taken to court has decreased by an even larger percentage.  Continued efforts by insurance companies and big businesses to “reform” the tort system should be seen for what they are: a transparent effort to deprive average citizens of their day in court and protect the big corporations who caused them harm.  Without trial lawyers and consumer advocate groups advocating for Texas citizens, the recently passed tort-reform legislation could have been much worse.