ATRA Urges U.S. House to Help Halt Lawsuit Abuse

September 13, 2004

The American Tort Reform Association (ATRA) is urging the U.S. House of Representatives to support the Lawsuit Abuse Reduction Act of 2004 (LARA), which is scheduled for debate in the House on Tuesday.

“This common sense civil justice reform would remove two of the biggest thorns in the side of the U.S. judicial system – frivolous claims and forum shopping,” ATRA President Sherman Joyce said.

LARA would impose mandatory, monetary sanctions against attorneys or parties who file frivolous lawsuits. The amount of the sanction would usually be the cost of defending the frivolous claim. It would place sanctions for frivolous or harassing conduct during discovery, extend federal court rule sanctions to state cases that affect interstate commerce, and reduce forum shopping in state and federal courts by requiring that a plaintiff in a civil tort action may sue only where he or she lives or was injured, or where the defendant’s principal place of business is located.

According to ATRA General Counsel Victor Schwartz, LARA cleans up the worst abuses in our justice system today. “Very few personal injury lawyers abuse the system, but they can cause havoc to a small business,” Schwartz said. “The majority of personal injury lawyers who are honest officers of the court should support this legislation; they should not permit bottom-of-the- barrel lawyers to dictate national public policy.”

LARA also reportedly stops discovery abuses.

Currently in “Judicial HellholeĀ®” Madison County, Illinois, a personal injury lawyer in an asbestos case is reportedly trying to discover the names of civil justice organizations to which the defendants are affiliated and how much money is given to those organizations. “These kinds of discovery abuses trample on First Amendment rights and are nothing more than scare tactics that unfortunately can force unfair settlements,” Schwartz explained.

Finally, LARA would put an end to nationwide forum shopping to Judicial HellholesĀ®. Plaintiffs would be permitted to sue where they lived, where they were injured, or in the defendant’s principal place of business.

“There is no reason for cases to be brought elsewhere unless one is seeking to find a biased forum for a case to be heard. Wealthy personal injury lawyers call these places ‘magic jurisdictions’ because they promise jackpot justice. We at ATRA call them what they are: Judicial Hellholes,” Schwartz said.

Judicial HellholesĀ® are state trial court jurisdictions where ATRA believes that impartial justice is unavailable. Personal injury lawyers reportedly seek out these jurisdictions and file cases there because they know they will receive a large reward, a favorable precedent, or both.

H.R. 4571 was approved by the U.S. House Judiciary Committee by an 18-10 vote Sept. 8. The bill was introduced in June by Representative Lamar Smith (R-TX) and would reinstate the original intent of Rule 11 of the Federal Rules of Civil Procedures.

ATRA noted that Senators John Kerry and John Edwards have stated that they support mandatory sanctions against lawyers who file frivolous medical liability lawsuits. ATRA has called upon the Senators to support mandatory sanctions against frivolous claims where they hurt the most – against small businesses.

“Kerry and Edwards have the opportunity to help millions of small businesses now by supporting the Lawsuit Abuse Reduction Act,” Joyce said. “These are the regular Americans that too often have to settle frivolous claims or face the threat of costly litigation that can result in putting those business owners out of business.”

“Lawsuit abuse is a barrier to economic growth,” Joyce said. “Each year, every U.S. citizen pays more for frivolous litigation and other abuses of our civil justice system.” LARA goes to the heart of these abuses.

The cost of lawsuit abuse is reportedly at an all-time high.

Today, the average family of four pays a $3,236 annual “tort tax,” a cost added to the price of products and services needed to cover the costs of litigation. No other industrialized country reportedly pays more as a percentage of its Gross Domestic Product.

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