Update: Texas Senate Passes An Even More Modified Version of “Loser Pays”

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As discussed in our post from last week, “Even the Battles Over Legal Reform are Bigger in Texas,” the Texas House had passed what seemed to us like a rather watered-down version of the traditional “loser pays” rule for some civil lawsuits. We concluded:

“It will be interesting to see if the Senate adopts the House bill as is, or makes changes to it which moves it back toward a more traditional, definitive application of the loser pays principle.”
The Texas Senate unanimously passed its version of the House bill yesterday, and it is quite a bit different from adopted House bill, but not in ways that moves closer to traditional loser pays.  As a Texas Lawyer story relates, the plaintiffs’ and defense bars worked together on the Senate version.
 
A legislative report produced by the Senate provides a good side-by-side comparison of the bills.  The major changes:
  1. The motion to dismiss vehicle that the Texas Supreme Court must develop should be for dismissal of cases “that have no basis in law or fact.” The House bill did not contain that language.
  2. The section on award of attorneys’ fees when this motion to dismiss vehicle is utilized stats that the court “shall” award fees upon dismissal. The House bill used the non-mandatory “may.”  The Senate also added a provision in this section exempting all government entities from the need to award attorneys’ fees.
  3. The Senate bill omits the entire sections of the House bill which allows for the award of attorneys’ fees and costs for the winning parties in certain enumerated actions (rendered services, performed labor, etc.) as well as fees and costs in breach of contract actions.

The House and Senate bills will now go to conference committee to be reconciled.  The House bill’s main sponsor wrote in an email, and quoted in the Texas Lawyer story, “I am pleased with the outcome in the Senate today, and am positive that this bill, once enacted, will make litigation in Texas fair, expedient, and affordable.” So it would be fair to presume that the final bill will look more like the Senate bill, which to us looks quite a bit less like “loser pays” than the House bill did. 

2 thoughts on “Update: Texas Senate Passes An Even More Modified Version of “Loser Pays”

  1. Pingback: May 31 roundup

  2. Pingback: Recently at WLF « The Legal Pulse

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