Sen. Delph has introduced SB 88 which would amend the statute permitting a court to award legal fees to the prevailing party for frivolous law suits or those litigated in bad faith and replace it with language that would require the award of attorney fees to the prevailing party in all cases.
So, this isn’t about frivolous law suits, those are addressed in the current law – this is about a penalty imposed against a party with a meritorious argument that just doesn’t happen to carry the day. I suppose England makes it work, so it’s not an unheard of system; but it is a substantial departure from current practice.
The new language would say “In all civil actions, the court shall award attorney’s fees as part of the cost to the prevailing party.”
So often in these fee shifting cases, you’ll see the tail wagging the dog. The amounts at stake in the underlying claim are fairly trivial or the issues resolvable, but to get to that point, large legal fees are incurred, making compromise impossible and, perversely, generating additional fees as both parties fight like grim death, not because of the substantive issues, but to avoid paying the other guy’s fees.
I can also see it encouraging more litigation in a dynamic where lawyers will be more willing to take on cases for judgment proof clients because they don’t care if they lose — they don’t have any money anyway, but if they win, they can pocket all those sweet, sweet legal fees from the big guy they’re suing. (I see prisoner litigation as a ripe place for this — if you can get a technical victory in 1 out of every 3 lawsuits, you can probably make it profitable.)
The middle class folks would lose biggest from this – people who have just enough to feel it if they lose (maybe some equity in a house) but not enough to withstand the blow if they have to pay $100k in some corporation’s ginned up legal fees because they were paying a partner and two associates to sit in on every deposition. The disincentive for people of modest means to pursue their rights would be significant.
Update There is a bit of a controversy about whether or not this bill being carried by Sen. Delph is part of Governor Pence’s legislative initiatives. It wasn’t on the Governor’s Roadmap during the election! As if that means a thing. The Roadmap was a political document full of unobjectionable pablum designed to convince a disengaged but vaguely supportive electorate not to pay much attention to the race. Stuff Gov. Pence supports and would like to see pass but which would have been controversial and drawn attention to the race would not have found its way onto the Roadmap. That doesn’t mean he isn’t going to push for it.
That said, I don’t pretend to have any insight on whether Pence is pushing it or if Sen. Delph got the wrong idea from a Pence staffer about Pence’s personal enthusiasm for this piece of legislation.
Well said, Doug.
Your last sentence says it all about this particular piece of junk legilsation.
How about just change the $1000 cap on QSO legal fees? The $1000 is just too small to have any bite in most cases. Make it $5,000 or $10,000 to at least make it interesting.
I could get on board with that. $10k seems about right.
Or maybe also have a sliding scale based on a certain percentage of the offer. Something like pay legal fees not to exceed the greater of $5,000 or 20% of the amount of the offer.
Would imagine that DTCI and Trial Attorney’s would throw some support for that. Get it done.
If we stipulate that there is, indeed a problem with frivolous litigation (and I’m not willing to do so), what you propose is the solution. The QSO only applies to cases sounding in tort, I believe. Perhaps that could be expanded slightly, as well.
If this nutty idea is enacted I think we may also see an increase in auto insurance rates since the insurance companies would have to pick up the additional costs if the plaintiff prevails.
The statute as proposed is also poorly, poorly written. What qualifies as prevailing? If I file suit and get a successful settlement? If I seek an injunction and the other party modifies its behavior as a result, even though the court never rules?
I think the people who will be hurt the most by this are the folks Pence embraced in his campaign ads (those middle class folks, the members of the military, etc.). We lawyers will have to counsel clients that although their case (say over construction defects in a home) may have merit, the risk of losing exposes them to tens of thousands in attorney’s fees. A number of people will be afraid to file suit because they don’t want to risk financial ruin.
Of all the insanity in the Lege this year, this one may be a top contender for the Annual Dumbshit Award.
I forgot to say that those with vast financial resources will not be deterred in going after the “little guy” since they will be able to easily absorb a loss and resulting fee award.
Think it would only apply to trials or cases settled by dispositive motions. But not sure how it would apply to admitted liability cases since win or lose is just an imaginary bar.
It also would appear problematic in cases in which both liability and damages are in dispute. Imagine a simple car crash case where Plaintiff contends that Defendant is at fault and that he has incurred $50,000 in related medical bills. Defendant says that Plaintiff is more than 50 percent at fault and that only $5,000 in medical bills are related. Defendant’s best pre-suit offer is a QSO of $17,500. Plaintiff’s lowest demand is $100,000. The case goes to trial. In front of the jury, I argue that only $5,000 in meds are related and that it was Plaintiff’s fault anyway. Plaintiff asks for $200,000. The jury comes back and says that Defendant was 100 percent at fault, but based on a determination that most meds were not related, renders a verdict of $20,000. As a practical matter, while not truly a win in a case where I thought I had a good liability argument, it’s certainly closer to the Defendant’s view of the case that the Plaintiffs. But under the new statute, because it was a judgment for the Plaintiff, and because the verdict slightly exceeded the QSO, defendant is on the hook for attorney’s fees, even though Plaintiff would have been better off taking $17,500 before trial than winning $20,000 at trial.
Or, what about a case where there are multiple causes of action, and the Plaintiff loses on 4 of 5 but still gets a big recovery. In such a case there would be judgment for both parties, wouldn’t there?
Well stated, counselor.
Mike Delph is “distinguishing” himself with a career of introducing awful, awful legislation, much of which never goes anywhere. No wonder he decided to carry Pence’s water, given the gov’s similar record in Congress.
I have always thought the loser should pay. Why is this a bad thing? You drag me into court and you lose, you foot the bill.
You have some control over your own legal expenses. You have none over the other guy’s.
Why is this a bad thing? Easy. Big company decides to take you to court over some perceived (small cost) issue. They have a lot of lawyers on staff who are being paid no matter what. You have to go hire an attorney to fight or pay up front (we used to call this extortion). Big company lawyers keep dragging case on and on until you either fold due to lack of cash to pay you attorney or until they win (they’ll keep appealing until they win). Then they’ll pound you with their $5000 victory and now be able to attach $70,000 worth of attorneys fees. This type of behavior already happens all the time in copyright cases, only now they’ll be able to toss their attorney fees on top to boot. Lather, rinse, repeat, profit!
Abdul, that goes on the assumption that you lost because you, in an equal fight against the other party, were proven to have brought a worthless case. As an attorney, you well know that all sorts of things can happen to make a case “lost” — namely, inadequate counsel compared to the other guy. So, say you’re suing a corporation for negligence — under loser pays, what attorney is going to what to take the case, knowing he or she is going against a phalanx of well-paid attorneys who have relatively limitless resources to fight? Or, as a citizen who probably doesn’t deal with the legal system much, how are you supposed to know whether an attorney is good enough to plead your case and win?
I know there’s frustration with cases where clearly all can agree something is being brought up frivolously, but it seems like there’s a better way to solve this than throwing the baby out with the bathwater, which is what this bill does.
It would be nice if a party who ended up in court through no fault of his/her own could be made whole after the case was over. In a perfect world.
If enacted, this bill will do nothing other than further erode equal access to the courts for people of limited means. Very sad…
Best I can tell, that’s the primary purpose.
This must be part of Pence’s plan to make Indiana more business-friendly – by tilting the courts in their favor.
This is about the ultimate fee-shifting to the advantage of well-financed groups. It has been called the “English” plan in Indiana case law. We embrace the “American” plan. As to “how” the system would work, I think the lawyers at BigLaw firms would scour the books and come up with lines of British cases to “fairly”—in BigLaw’s many eyes—set the parameters. As someone already posted, we have a provision for attorneys’ fees in I.C. 34-1-52-1 (I think that’s the cite) for “frivolous litigation.” There also is T.R. 11 and one’s ability to request sanctions there. And we should not disregard T.R. 37 and sanctions available for discovery violations. Senator Delph obviously harbors anti-American sympathies, since he is against the “American” system of fees that our country chose back in the days of The Framers.
I thought there was also TR68 as a partial remedy?
My understanding is that this kind of rule already somewhat exists,
such as if a Plaintiff wins a police brutality case in federal court. Jury awards $2K to the Plaintiff but then the Plaintiff’s attorney requests $22K in fees (or more).
Apparently, Sen Delph mercifully pulled the bill on Feb 1. A previous sponsor of the same bill indicated that it just “didn’t work”. Maybe Sen. Delph could have consulted with him before introducing the bill.