Legal News

Is ?Loser Pays? Coming to Texas?

By Ashby Jones

The answer to the question in the title of this post is no. Well, at least not yet.

It’s decidedly premature for anyone to rejoice or despair over the impending arrival of a change in the Lone Star state that would make the loser in a lawsuit pay the fees and costs of the other side.

Nevertheless, folks in Texas are mulling over a change to the so-called “English Rule,” so named because, well, “loser pays” is the way they do it across the pond. Click here for the Texas Tribune story, running over at NYT.com.

In his February State of the State address, Texas Gov. Rick Perry praised such an approach, and since then Perry has been shopping loser-pays legislation to lawmakers with the hope of soon ginning up some legislation.

But would the legislation be one-way or two-way? In other words, would the “pay the winner” requirement apply only to unsuccessful plaintiffs? Or would it also apply to defendants?

For now, according to the Texas Tribune story, it’s unclear which version would work its way into legislation.

But any proposal would have an uphill battle for several reasons. For starters, some think the notion that there are too many lawsuits is overblown. Furthermore, adopting such a rule could lead to some strange scenarios, like one raise by Thomas M. Melsheimer, a litigator in Dallas with Fish & Richardson. "It's really hard to imagine there being much grass-roots support for it once people understand that it could make the ordinary citizen suing Wal-Mart pay for Wal-Mart's legal fees if they lose," he said.

True dat. But this 2008 story in the WSJ explored ways to minimize the burdens on losers under a loser-pays system, like, for instance, insurance.

Full post as published by Law Blog - WSJ.com on March 11, 2011 (boomark / email).