Houston Injury Lawyer Explains How It Almost Became “Winner Pays”

February 18, 2012 by

As a Houston injury lawyer, I paid close attention to the evolution of Texas House Bill 274, which included provisions related to who would pay attorney fees and litigation costs in a lawsuit. The bill, which was intended to institute a “loser pays” rule, almost actually put the burden of these costs on the lawsuit’s winner in some cases, which would have created a system that’s completely unfair for plaintiffs just trying to get justice for themselves.

 Houston Injury Lawyer on the Evolution of House Bill 274

 The initial version of the Bill that was introduced allowed the defendant to decide whether or not the prevailing party would pay the attorney’s fees, so eventually the House Committee on Judiciary & Civil made major changes to the bill. Unfortunately, the new version would have allowed a party to win a lawsuit, but then owe litigation costs, including attorney’s fees and court costs, to the opposing party, essentially making it a “winner pays” system instead of “loser pays” as was intended.

 How did this unbelievable situation almost happen? The new legislation would have made changes to Chapter 42, which is triggered if a judgment is “significantly less favorable to the rejecting party” than the settlement offer. A judgment is considered “significantly less favorable” if the rejecting party is a claimant and the award is less than 80 percent of the rejected offer or the rejecting party is a defendant and the award is more than 120 percent of the rejected offer. Previously, there was a cap on recoverable litigation expenses that ensured that a plaintiff would never owe a defendant money on a case that the plaintiff won.

 The new law would have done away with this language.

 Let’s say you were in a Houston car accident and were injured, and you decided to sue the person who caused the accident. The defendant offered you a settlement of $20,000, but you rejected it because you felt your pain and suffering were worth more than this. Then in court, you and your Houston injury lawyer won the case but were only awarded $15,000. Since this is less than 80% of the original offer, you would have to pay the defendant’s litigation expenses. Let’s say the defendant’s law firm had assigned several partners, associates, and paralegals to your case, and run up a bill of $50,000. As a result, you would have won the lawsuit – but end up owing the person who caused the Houston car accident $35,000!

 Luckily, the final version of the bill corrected this issue, but for a time, there was a chance that the Texas system could have become “winner pays” instead of “loser pays” as was intended. As a Houston injury lawyer, I am always keeping an eye out for potential legislation such as this one which can adversely affect my clients’ ability to seek justice in court.

 If you or a loved one have been injured in an accident, contact Marc Whitehead, a board certified personal injury attorney in Houston, Texas or download our free ebook, Car & Truck Crashes, 10 Secrets Victims Should Know To Protect Their Rights.