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Loser Pays; Everyone Wins

Stanley Feld M.D.,FACP,MACE

President Obama has done nothing about Tort Reform. Either he does not believe tort reform is part of the healthcare systems’ cost problem or the lobbyist for the plaintiff’s attorneys have gotten to him and the Democratic Party.

He humored Republicans when they brought up tort reform up at his “bipartisan” healthcare summit last year. He said he would take tort reform under advisement and think about developing some pilot programs.

Previously, I mentioned that I am not a Governor Rick Perry (R Tx) fan for several reasons. Lately, he has come up with some practical ideas. He could convert me.

In 2003, Rick Perry and the Texas legislature unenthusiastically changed tort reform laws in Texas. The revision has changed the liability climate in the state for businesses and physicians. Texas rewrote everything from class-action certification to product liability. One big success was eliminating the asbestos-silica litigation scam.

Rick Perry and the Texas senate rewrote the medical malpractice laws, ending plaintiff attorneys’ practice of venue shopping for friendly judges. They also put a cap of $250,000 on noneconomic damages like pain and suffering.

These reforms have been great for the legal climate in Texas. The reforms limited plaintiffs attorneys profitability on frivolous liability claims. Texans believe that because of these reforms and the lack of a state income tax, Texas is the country’s best state for job creation.

Before tort reform, Texas was considered the state in which to initiate law suits of all kinds. We had the “Kings of Tort” in Texas. Medical malpractice rates have fallen by 27.5% on average since 2003. It is no longer profitable for malpractice attorneys to file a frivolous law suits. The result has been a 60% increase in the number of doctors applying to practice in Texas. The overall population of the state has only grown 14%. Texas no longer has a shortage of obstetricians or emergency room physicians.

Rick Perry has been impressed with the results of his tort reforms. He now wants to extend his state’s impressive tort reform record.

Mr. Perry is proposing a British-style "loser pays" rule, which would require plaintiffs to pick up the legal costs of their targets if they lose their suits.

Almost all of America’s economic competitors in the world follow this standard. “Losers Pay” as a deterrent to law suits decreases the cost of doing business resulting in lower prices and a competitive advantage for business. “Loser Pays” would deter junk lawsuits.

Trial lawyers and their Democratic codependents have blocked states from making this revolutionary improvement to U.S. civil justice.

It would add an extra disincentive for the tort industry to bring suits that Texas law already defines as "groundless." The lawyers and firms that file such claims would pay an additional penalty, a downside they would have to weigh against their chances of personal enrichment.

The previous changes in malpractice reform have helped end the Texas physicians shortage in rural areas.

Twenty-three counties now have their first E.R. doctor, 10 their first OB-GYN. Hospitals are reinvesting the malpractice savings in scarce services like neurosurgery and neonatal units and expanding access to care.”

The earlier success in Texas with tort reform has opened the eyes politicians and produced advocates in Oklahoma. Even Democrats have been forced to agree to some legal reform. The lawyers are lining up to fight the “loser pays” initiative. Limits on damages have worked wonders for the state economic growth in Texas.

“Loser pays” will increase job growth and economic development even further.

Republicans picked up 16 governorships and at least 675 state legislative seats throughout the nation in November. The new state governments are looking at the progress in Texas. They are starting to follow Texas’ lead.

America will not need President Obama to do the right thing regarding tort reform. The states will get America out of its damaging litigation mess.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

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