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Texas Considering Awarding Attorney Fees to Successful Malpractice Defendants?



While states such as New York, Tennessee, and North Carolina are considering caps on medical malpractice lawsuits, Texas Governor Rick Perry enacted a cap on non-economic losses (mainly pain and suffering) back in 2003. Perry's present goal goes further than caps on jury awards. He claims that, despite the cap, Texans are still being sued in frivolous lawsuits that can cost millions to defend. His idea? It's called "loser pays."

The "American Rule"

Governor Perry would like Texas courts to change the long established "American rule" about attorney fees. In the United States, each party to a lawsuit usually pays their own attorney fees, regardless of who wins or loses the case. Advocates of tort reform measures such as caps on jury awards have long argued that the American rule encourages frivolous lawsuits. Most medical malpractice victims do not have the financial resources necessary to pay for various legal expenses such as court costs and expert fees. Therefore, many attorneys agree to take on cases on a contingent fee basis. If the patient wins the case, the attorney is paid from any award the patient receives. This includes some element of risk for the attorney because if the case is lost, there is no payment of the attorney's fee. Critics complain that this allows claimants to start groundless lawsuits because they have nothing to lose. The hope is that the insurance company will settle the case rather than incur the expense of defending it in court. When claimants lose their cases, they do not have to pay their attorneys. Malpractice defendants, on the other hand, have to pay defense costs, whether they win or lose.

The "English Rule"

Perry's suggestion is to adopt the "English rule" for malpractice cases. In England, the party that loses the case has to pay the other side's attorney fees. The thinking is that if you run the risk of having to pay thousands of dollars in attorney fees, you will not risk bringing a frivolous lawsuit. Yet opponents of the English rule argue that it will prevent not only frivolous lawsuits, but that it will also frighten victims with legitimate claims into not filing lawsuits to protect their rights. Governor Perry's suggestion was made while on the campaign trail, and no legislation has been introduced as of yet. However, considering that Texas has led the way for some states regarding caps on jury verdicts, the discussion in that state of adoption of the English rule is troubling for medical malpractice victims.