TX Governor Signs Bill to Reduce Employer Legal Battles

June 3, 2011 (PLANSPONSOR.com) – Texas Governor Rick Perry signed House Bill 274, which implements a loser pays system for frivolous lawsuits in the state.

According to a press release from Perry’s office, under the measure, Texas judges will have the ability to dismiss a frivolous lawsuit immediately if there is no basis for the suit, with the prevailing party able to recover their attorney’s fees from their opponent. Also, trial judges who think a question of law can end the case can now ask an appeals court to decide the matter, eliminating the need to play out the entire, costly trial before the question is decided by a higher court.  

HB 274 also creates expedited civil actions for cases involving less than $100,000, which will cut down on court time and costs in smaller cases. It encourages timely settlements by penalizing parties who turn down fair settlement offers in search of a “home run” at trial.  

“Thanks to these important new reforms Texas employers will spend less time in court and more time creating jobs,” Perry said in the announcement.  

Texas business groups applauded the measure.  

“A fair and efficient legal system is an important consideration when manufacturers look for locations to set up shop and invest their resources,” said Luke Bellsnyder, Executive Director of the Texas Association of Manufacturers.  

“The Texas Association of Business applauds Gov. Rick Perry for his leadership to ensure that Texas’ courts are balanced and fair to all,” TAB President and CEO Bill Hammond stated.