May 2011 Archives

May 31, 2011

Loser Pays Legislation Signed Into Law In Texas

scales of justice.jpgTexas Governor Rick Perry signed into law a measure that will further limit the filing of frivolous lawsuits by making the party who filed the lawsuit pay the other party's court costs. Under the loser pays model, if the party filing the lawsuit, usually referred to as the "plaintiff," loses the case, then the defendant can ask the judge make the plaintiff pay the defendant's court costs. Likewise, if the plaintiff wins the case, then the plaintiff can make the defendant pay their court costs. Court costs often run into the thousands and tens of thousands of dollars in bigger cases.

Most lawyers would agree that a fair definition of a "frivolous lawsuit" is one that has absolutely no merit and would eventually either be dismissed by the judge or ruled against by a jury.

North Carolina has long followed a form of the "loser pays" model of limiting frivolous lawsuits. In North Carolina, a defendant can file what is called an "offer of judgment," offering to pay the plaintiff an amount the defendant believes is reasonable, and if the plaintiff fails to accept the offer of judgment and goes forward to trial and recovers an amount that is less than the offer of judgment, then the defendant can ask the judge to make the plaintiff pay all of the defendant's court costs.

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