‘Loser Pays’ Lawsuit Bill Clears House, 58-38

After more than two hours of debate, the House voted 58-38 Tuesday for a “loser pays” lawsuit system that Democrats contended will intimidate average citizens from going to court against big corporations.
Under HB3124, if a judge grants a defendant’s motion to dismiss a lawsuit as having “no basis in fact or law,” the plaintiff who brought the lawsuit would have to pay the defendant’s attorney fees of up to $10,000.
Sponsor Rep. Vance Dennis, R-Savannah, said the bill would help “small businessmen and farmers trying to defend against frivolous, bogus lawsuits” and who otherwise would have to pay their own lawyers “thousands of dollars.”
Critics such as Rep. Mike Stewart, D-Nashville, said the real effect would be to make people of modest means fearful of going to court when there was any chance of losing. Stewart said the “chilling effect” of a $10,000 penalty on average citizens would, in contrast, be inconsequential to wealthy corporations and insurance companies.

Democrats offered several amendments that were killed by the Republican majority. One by Stewart, an attorney, would have declared that, if a judge rules against the defendant on a motion to dismiss, the defendant would then have to pay the plaintiff’s lawyer up to $10,000 in legal fees.
As “basic fairness,” he said, the bill should at least leave a corporation to pay the plaintiff’s lawyer fees if a judge finds the corporation has made a frivolous claim that the lawsuit is unwarranted.
“Let’s make it work both ways. We shouldn’t have rule where one side has to pay and the other side doesn’t,” he said.
Dennis said Stewart was making an “apples to oranges” comparison because the legal situation for the two sides is different in motions to dismiss.
An amendment offered by Rep. Gary Odom, D-Nashville, was also killed. It would have declared that if a judge finds a motion was filed without basis in law or fact, the plaintiff’s lawyer – not the plaintiff individually – should be responsible for paying the opposing side’s legal fees.
As an example, Odom contended that his 86-year-old mother, if told by an attorney that she had solid grounds for a lawsuit, should not be penalized for relying on that advice after she had already paid her own lawyer’s fees.
Dennis said that, in such a situation, Odom’s mother could file a lawsuit against her own lawyer after he lost.
The bill now goes to the Senate, where it is scheduled for a floor vote today.

Leave a Reply