Loser Pays?

The political machine "Texans for Lawsuit Reform" is working hard to get Texas Republicans to line up and support tort reform, particularly, House Bill 274 and Senate Bill 13.  Rick Perry, Representative Brandon Creighton, and Senator Joan Huffman are getting out the word that "Loser Pays" is a winner.  What is "Loser Pays"?  Simple: those who lose in court are required to pay the other party's attorney fees, travel expenses, court costs, and other various fees.

What they aren't telling you is this: the legislation doesn't apply to "losers," it applies to defendants.  Period.  That means that plaintiffs will toss in the cards because they know they have even more to lose in this plaintiff-unfriendly state.

The loser bandwagon claims that tort abuse (personal injury claims, for instance) is a big problem in Texas.  That's wrong.  Throughout the country, and in Texas, tort claims have steadily decreased while all other causes of action have remained the same or risen.  The National Center for State Courts, a nonpartisan collective of judicial resources, have concluded that from 1997 to 2006, tort claims have plummeted 21%.  This is despite an overall increases in litigation of 8% across the country.  In short, tort claims are the only area that have continually fallen, including medical malpractice (8% drop), products liability (4% drop), motor vehicle accidents (23% drop), etc.  The report can be found here.

But wait, doesn't that mean that the frivolous claims are disappearing, and tort reform is weeding out the bad cases?  Apparently not.  Take medical malpractice.  According to the Texas Medical Board, despite medical malpractice reforms and the documented decrease in medical malpractice cases, administrative medical malpractice investigations have skyrocketed at a 61% increase through 2009.  This suggests that injured patients are being told by Texas attorneys they can't win, and so their only means of recourse is to file grievances with the medical board.  That is a sad state of affairs.

The loser bandwagon also doesn't want to mention one final thing.  All of these advocates for the "Loser Pays" system received generous paychecks written by Texans for Lawsuit Reform.  Brandon Creighton received $10,000 from TLR for his 2010 campaign.  So did Senator Huffman and Senator Deuell.  Finally, Rick Perry, who championed the benefits of "Loser Pays" last February received $158,025 from TLR in 2010.

This is only a component of the tort reform initiative underway.  We will report more on the other aspects of H.B. 274, S.B. 21, S.B. 13, and S.B. 1856.

So That Explains It

We've recently been covering the tort reform developments in the Texas Congress.  It looks like the big player again is "Texans for Lawsuit Reform" (TLR).  For those who don't know, TLR claims to be comprised of "small business owners, homemakers, and community volunteers."  Truth be told, TLR is one of the most affluent political action committees in Texas.  In the 2000 election cycle, TLR spent $1.4 million to pass tort reform. Now they're back, and they have spent over $5 million from January '09 to September 2010.  This likely explains some of the recent tort reform efforts that are underway. 

These days, TLR has been launching an all-out assault on injured plaintiffs.  If you still don't believe it, believe this: just last October, the right-leaning Dallas Morning News reported that TLR contributed almost $108,000 to then-GOP-challenger Cindy Burkett (who won).  TLR also doled out nearly $101,000 on Stefani Carter (who also won).  Finally, TLR spent a combined total of almost $150,000 on the campaign for GOP candidate Kenneth Sheets (again, who also won).  That's just the tip of the iceberg.

Despite its "salt of the earth" reputation, TLR is a massive corporate enterprise that wields enormous influence in Texas politics.  What does this mean for 2011?  We will have more later.

What Are Plaintiffs to Do?

We are shocked to find that no one has commented on the introduction of Texas Senate Bill No. 1856 since it was filed on March 11, 2011.  This bill, if enacted would have appalling consequences for injured plaintiffs throughout Texas.

In essence, S.B. 1856 would rewrite Texas Civil Practice and Remedies Code Section 41.0105 such that injured plaintiffs can only recover what they actually paid to the hospital or physician that rendered services.  Based on the literal meaning of the bill, Plaintiffs who are too injured to earn a paycheck and pay off their outstanding balances are out of luck because those remaining bills are not recoverable.

Most litigating attorneys know all too well the long history behind Section 41.0105.  Initially, the statute was part of 2003's wave of tort reform.  The statute stated that plaintiffs' recovery for health care expenses was limited to the amount "actually paid or incurred."  This raised a number of legal questions.  One of the questions was whether plaintiffs could recover the gross medical charges when some of the charges were written off.  That is, many claimed that if plaintiff had a $1000 bill, of which $500 was written off, the plaintiff should still recover the full $1000.  Unfortunately several courts of appeal disagreed, holding that plaintiffs were limited to recovering the remaining $500.

In 2007, the Texas House tried to clear up the confusion with HB 3281, which would have overturned the court cases and make section 41.0105 applicable only to medical malpractice claims.  The House unanimously passed the bill, and only 2 Senators opposed it.  Unfortunately, the bill was promptly vetoed by Governor Perry, thus precluding plaintiffs from recovering medical bills that were adjusted out.

Now the text of the proposed bill is not abundantly clear, and we will have to see what the legislative intent is behind the text.  But, based on the bill's plain meaning, S.B. 1856 would apparently prohibit plaintiffs from recovering outstanding balances, or amounts actually "incurred" (hence, the bill strikes the word "incurred," which was previously part of 41.0105).  Instead, plaintiffs would be limited to recovering what they actually paid to a physician or health care provider as a full payment of their medical bills.  If this reading is correct, the results would be disastrous.  Plaintiffs who are so injured that they cannot return to work and therefore cannot pay their medical bills would be precluded from collecting for the outstanding balance (which they would need to pay that balance) If this is the intent behind S.B. 1856, what are plaintiffs to do?

It isn't hard to see the reasoning behind S.B. 1856.  Senator Deuell was himself a practicing physician and today is a vocal and ardent conservative.  Senator Deuell is also a strongly favored by the Texas Medical Association.  These ties make for a bad bill and bad public policy.  This bill would punish only the poorest and most injured people while rewarding medical facilities and negligent individuals throughout the state.  Hopefully, S.B. 1856 will not pass, but we will be paying close attention to later developments.

Fallout over "Shpoonkle"

Initially, our office was unsure whether this story would take off, but apparently it has generated a lot of controversy since the news hit earlier this week.  A 21-year-old NYU law school student is preparing to launch "Shpoonkle," a reverse auction site in which consumers would post their legal problems and lawyers would bid the lowest possible price to win the client's case.  Proponents of Shpoonkle claim it would allow the indigent more access to attorneys, who often charge exorbitant prices on an hourly basis.  However, detractors are calling this a race to the bottom, where the least qualified attorneys are going to prey upon the least sophisticated individuals.  According to the ABA article here, several attorneys have already signed up with Shpoonkle.  Still, doubts linger whether Shpoonkle will ultimately survive.  There seem to be a quandary of ethical problems involved with such a site, which probably explains why so many similar sites have been shut down in the past (as noted here).

No doubt there are well-paid attorneys who are objecting to Shpoonkle because it would presumably affect their bottom line.  But regardless of that, the idea appears to have its problems. 

To my mind, I see it like this: If I were a doctor, and there were a site (and there might be one) where patients post their medical problems online and physicians bid as low as possible to retain the patient, I would want no part of it.  And if that seems unethical and predatory for licensed physicians, it would seem no different for licensed attorneys.

Ten Things to Do If You Are in an Auto Accident

1)      Call the Police and Request an Accident Report. 

First and foremost, always call the police and get the responding officer to complete an accident report, even if you think one is unnecessary.  Far too often, we meet clients who, for one reason or another, decide to work it out between themselves and the other driver without the assistance of an outside third party.  Sometimes, this can result in the liable party changing stories, and without the aid of an accident report, it comes down to one person’s word against the other.  Even though calling and waiting for the police is inconvenient and time-consuming, sometimes it is mandatory.  In fact, Texas law requires you to report certain accidents, including those involving bodily injury or involving damage to a vehicle to the extent that it cannot be normally and safely driven.  So before continuing on your way, call the police.

2)      Consider Calling for an Ambulance.

Your health is of paramount importance.  Granted, the cost of going to the emergency room is steep, and ambulance bills are often several hundreds of dollars.  But if your injuries are severe and you need urgent medical attention, take care of yourself first.  If you are bleeding profusely, you do not have the time to look for eyewitnesses or take notes about the other driver.

3)      Keep Your Cool.

Car accidents are nerve-racking experiences.  This can compromise your judgment, and you can make poor decisions.  If you follow this general tip, you will be less likely to make mistakes that could hurt your case down the line.  If you aware rational about your situation and realize that you need to calm down and be objective, you will be doing yourself a big favor.

4)      Get All the Information from the Other Driver You Reasonably Can.

Typically, an accident results in both drivers exiting from their vehicles, exchanging insurance, and moving on.  Just trading insurance information can be risky.  First, if you end up having to file a lawsuit and the information is in some way unreliable, it can be difficult to track down the other driver.  Get a name and ask to see their driver’s license.  If you followed step 1 and obtained an accident report, this will document just about everything you will need.  Also note what the driver was doing.  Was he/she on their cell phone?  Did they have food in the car?  Did they appear intoxicated?  Were they in a hurry?  These are all questions that become more and more difficult to answer as time goes by.  So noting them now will help you later.

5)      Watch What You Say!

Everyone says foolish things from time to time, particularly in stressful situations (see point number 3).  If you apologize or deny it was the other driver’s responsibility, those statements could potentially be admissible down the road.  Although the Texas Rules of Evidence protect against the admission of hearsay, there are exceptions where one person’s admission of liability or offer to pay for medical assistance may, in certain circumstances, be admitted in court.

6)      Try to Find Eyewitnesses.

You never know when you may need someone to corroborate your side of the story, especially when the other driver denies fault.  Although this can be an awkward process, you may be surprised by the kindness of others, as people are often more than happy to give their name and number and even write a brief statement indicating what happened.  This can also help reduce the chances of going to court; if the other driver’s insurance realizes they have to fight not one but several individuals, they may be more inclined to settle without the need for litigation.

7)      Wait Before You Decide That You Are Injury-Free.

Car accidents do not always involve immediate, life-threatening injuries.  Frequently, motorists will be involved in an accident, feel fine, and then start noticing symptoms that night or the next day.  This is because many accidents involve soft-tissue injuries, which are not immediately visible to the naked eye.  For this reason, if you begin developing pain, you should carefully consider seeing your doctor before dismissing it as a fluke occurrence.

8)      If Possible, Make Notes of What Transpired After the Event.

The sooner you can take notes of what happened, the better.  If you have life-threatening injuries that require urgent medical care, you will not have time to take notes of what happened.  But when you can, taking notes can be essential to your case.  Litigation can take years, and over the course of time, memory fades and people forget the details.  By keeping a journal of what took place, you can help yourself recollect what transpired when those details become important later.

9)      Keep Records of All Your Bills and Other Paperwork.

Documenting pharmacy receipts, medical records, and vehicle repair work can be invaluable to bolstering your case should litigation occur.  Although your attorney will eventually need to authenticate these records, you can start early and do your part to assist the attorney do his or her job.  Get a file folder and keep everything related to the accident in there.  Staying organized essential to protecting your rights; your attorney knows!

10)  Talk to an Attorney Before Signing Anything.

When offered a check to pay your medical expenses, it can be tempting to simply cash it and move on.  However, you should be careful not to sign away your rights for the sake of quick cash, particularly when the extent of your injuries may be unknown.  As noted in point 7, soft-tissue injuries can take years, and may never fully heal.  Therefore, you should take care to talk to a professional before signing anything.  Move quickly to find an attorney who is willing to discuss your situation.  There are many qualified attorneys out there who are willing to help.  Take advantage of those resources, that is what they are there for.