House debates tort reform

March 07, 1995|By New York Times News Service

WASHINGTON -- The House began debating yesterday a package of bills intended to reduce the number of lawsuits, taking up as its first item a sharply weakened version of a proposal to require those who lose their challenges to pay the legal costs of their opponents.

The debate over the so-called "loser pays" provision began a weeklong effort by the Republican-controlled Congress to vastly overhaul the U.S. legal system.

The proposal, which the House is expected to vote on today, would write into law a modified version of the so-called English Rule that requires those who sue and lose in civil cases to pay the costs and fees of their opponents in many cases.

But the bill is so sharply curtailed from the proposal that was part of the House Republicans' "Contract with America," last fall's campaign manifesto, that it is an increasing misnomer.

GOP Rep. Robert Goodlatte of Virginia, a lawyer and member of the Judiciary Committee who crafted the modified version, said it would encourage both parties to settle many lawsuits before they reached court.

Under the Goodlatte provision, in some circumstances the winning side in a lawsuit could be forced to pay the loser's fees and court costs. As a consequence, the bill now is less a "loser pays" measure than an incentive to settle.

Rep. John Conyers Jr. of Michigan, the ranking Democrat on the Judiciary Committee, set the tone of the debate when he said the legislation would implement "a contract with corporate America" that would result in blocking the ability of ordinary people to bring lawsuits to recover damages.

The high-stakes debate over the Republican efforts to overhaul the system of civil litigation has engaged nearly the entire spectrum of Washington's lobbyists, representing all groups that would be affected.

The Clinton administration, which had remained silent during the early weeks of legislative consideration, said this weekend that it has decided to oppose much of the legislation.

The White House counsel, Abner J. Mikva, a former U.S. appeals court judge, said the legislation would dramatically tilt the playing field against consumers and middle-class citizens in favor of the business community.

Here is how the proposal modified by Mr. Goodlatte would work:

A party would be declared the "loser" if he or she refused a settlement offer and the jury came in with an award lower than the settlement proposal. For example, if a person sued a corporation for damages, the corporation's offer of $50,000 to settle the suit was rejected and the jury awarded the party $40,000, the plaintiff would be declared the loser and would have to pay the corporation's costs.

Under the Goodlatte measure, the loser would be liable only for legal fees equal to his own.

Mr. Conyers said the Goodlatte modification "makes a mean-spirited bill less mean-spirited but it still remains an anti-working person's bill."

But Mr. Goodlatte said the bill would cut down on the number of frivolous and fraudulent lawsuits by creating a strong incentive for both sides to reach a settlement. The measure would affect only state suits that end up in federal court because they involve two states and the damages sought exceed $10,000.

Although those conditions would limit the measure's application, the legislation would be highly symbolic as part of the overall effort to limit the number of civil suits.

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