Texas Needs a Bilateral “Loser Pay” Statute

For years the business and insurance lobby in Texas claimed that they needed a “loser pay” statute in order to recover their legal fees and expenses when they were subjected to frivolous lawsuits. In 2003 the Texas legislature passed Chapter 42 of the Civil Practice and Remedies Code which includes a loser pay provision. Section 42.002(c) provides that only the defendant may invoke the loser pay provisions but that once invoked by the defendant the loser pay provision was available to either party. Not once since its passage have I seen a defendant invoke the Chapter 42 loser pay statute.

It seems that the defendants are not interested in a loser pay provision if it applies equally to both frivolous claims as well as frivolous defenses. The reality of personal injury litigation is that the insurance companies use the delay and expense of litigation in an attempt the starve the injured claimants, who are usually out of work, burdened by mounting medical bills, and often without transportation, into accepting a substandard settlement. It would not be advantageous for the insurance companies to delay the payment of legitimate claims if that delay was going to come with the obligation of paying the claimant’s legal fees and expenses.

When the insurance and business world lobbied for a loser pay statute what they sought was not the shifting of the burden of legal fees and expenses from the prevailing party to the party which caused the protracted litigation but rather an unfair, one sided advantage over injury victims. The fact that the defendants refuse to invoke the loser pay provisions of Chapter 42 because those provisions would then be applied to both parties underscores the defendants’ abuse of the litigation process and the need for the provisions of Chapter 42 to be available to be invoked by either the plaintiff or the defendant.

If the plaintiffs could invoke the loser pay provisions of Chapter 42 it would cause the insurance companies to think twice before using litigation in an attempt to starve an injured claimant into unduly compromising a legitimate claim.

For more information contact a Tyler Injury Lawyer today.