There is a broad public consensus against frivolous lawsuits. Yet a fundamental foundation to our individual freedom and the free enterprise system is open access to courts for redress of wrongs.
Finding the right balance between free access to open courts versus the elimination of frivolous claims has been the difficult challenge of the tort reform movement.
In Texas, the concept of open courts is firmly placed in our state’s constitution. But over the years, many litigants and attorneys have abused this open court privilege by filing meritless lawsuits, extracting nuisance value settlements, and scaring otherwise innocent defendants into what essentially amounts to legal extortion. It is paramount to have both a fair, open court system and to eliminate frivolous lawsuits.
Three bills designed to help end the abusive practice of filing frivolous suits are in the legislative process. Senate Bill 13 by Sen. Joan Huffman, House Bill 274 by Rep. Brandon Creighton and House Bill 2661 by Rep. Tim Kleinschmidt use different approaches. But all strive toward a similar outcome: end the filing of frivolous lawsuits, provide for the early dismissal of frivolous claims, and assess the litigant and attorney who bring a frivolous lawsuit the costs incurred by an innocent defendant.
Eight years ago, the Legislature passed House Bill 4, the omnibus tort reform bill that included many of the recent changes to the medical malpractice lawsuit system. I included an “offer of settlement” provision hoping to encourage quick settlements and discourage meritless lawsuits. The vast majority of House Bill 4 has worked well to achieve its stated goals, but this one provision has lacked success.
Each of the three bills now in the legislature seeks to strengthen this provision in the law so that it works properly. I am glad to see the Legislature is once again trying to end the practice of legal extortion from meritless claims.
One often suggested change to the tort system is to adopt a simple “loser pays” law which will make the loser of a suit pay the winner their legal fees and expenses. The problem with a pure loser-pays system (similar to what is used in England or Canada) is that it effectively prohibits an average citizen from bringing a lawsuit.
Under a pure loser-pays rule, only those who can afford to pay the cost of losing a suit can bring a suit. This means either the very wealthy or the very poor (because they are judgment proof) would be the only people with viable access to the courthouse. For this reason, a true loser-pays system may violate the “open courts” provision of the Texas Constitution.
Therefore, under the American judicial system, a combination of a modified loser-pays rule, an offer of settlement rule, and a procedure for early dismissal of meritless cases provides the best balance between eliminating frivolous claims while still protecting access to the courthouse.
It is right for Gov. Rick Perry to have asked the Legislature to examine this problem in detail and craft a solution. The tort system, in which the rights of those who have been wronged as well as the rights of those who have done no wrong are fairly adjudicated, should be protected and continually improved.
I believe our Legislature can craft a good solution to prevent frivolous lawsuits and bring an end to legal extortion from those who have done no wrong while still maintaining open access to the courthouse.
The Honorable Joseph M. Nixon is a Senior Fellow with the Texas Public Policy Foundation and of counsel with the Houston law firm Beirne, Maynard & Parsons, LLP. He served six terms in the Texas House of Representatives and chaired the House Committee on Civil Practices during his last two terms.