Tort “Reform”: Does Governor Perry Not Understand What “Loser Pays” Means Or Is He Trying To Defraud The Texas Public?

Another legislative session, another round of talk about tort “reform.”

As you may know, Governor Rick Perry gave his “state of the state” speech earlier this week.  Not surprisingly, he talked about tort reform, and his support of a  “loser pays” system.

What is “loser pays”? It really isn’t hard to figure it out. It’s just like it sounds. Under a “loser pays” system, the party that loses a lawsuit has to pay the other side’s attorneys’ fees and costs.

While “loser pays” is the rule in most countries, it’s not the rule in the United States.  With minor exceptions, parties to lawsuits in Texas are required to pay their own costs and attorneys’ fees regardless of the outcome of the case.  Under a “loser pays” system, that changes because the losing side pays the winning side’s attorneys’ fees and costs.

Unfortunately, Governor Perry apparently doesn’t understand what “loser pays”  means or he’s trying to defraud the public. In his state of the state speech, he stated:

Texas needs a ‘loser pays’ component in our legal system, in which those who sue and lose are required to pay the court costs and legal expenses of those they sued.

That’s not a “loser pays” system, that’s a one-side “plaintiff pays” system.   I have no doubt that Governor Perry knows that his proposal isn’t a “loser pays” proposal.  Instead, he’s probably done some polling that found the phrase “loser pays” is popular, and now he’s trying to defraud all of us.

In Texas, you can’t try to sell a mule to someone by calling it a horse.  But that’s exactly what Governor Perry is trying to do.  He’s not proposing a “loser pays” system no matter what he calls his proposal.

We should call him on it.  

Because if he was in any other business, we’d call what he’s doing “fraud.”  You can’t sell a product or an idea by calling it something it’s not.  Particularly when it has the potential consequences of something as draconian as his proposed system.

The unfairness of this proposal should be obvious to anyone looking at it with even a minimal eye toward impartiality.

But perhaps the more important problem is that the one-sided proposal defeats many of the purposes of a true “loser pays” system.  For years, conservatives have touted the benefits of a true “loser pays” system, but Perry’s slanted proposal loses most of the benefits previously touted.  We’ll talk about that tomorrow.

Posted on: February 10, 2011 | Tagged

Perlmutter & Schuelke, PLLC maintains offices in Austin, Texas. However, our attorneys and lawyers represent clients throughout the state of Texas, including Dallas, Houston, San Antonio, Forth Worth, El Paso, New Braunfels, San Marcos, Kyle, Buda, Round Rock, Georgetown, Lockhart, Bastrop, Elgin, Manor, Brenham, Cedar Park, Burnet, Marble Falls, Temple and Killeen. By Brooks Schuelke


Law Firm Website by CLM Grow