Related topics

Republican Lawmakers Push ‘Loser Pays’ Proposal for Legal Fees

February 7, 1995

WASHINGTON (AP) _ A $480,000 award for burns from a spilt cup of McDonald’s coffee. A $2 million lawsuit over a teen-ager’s lost spelling bee. Republicans are reciting a litany of litigation as they push a proposal to make losers pay the winners’ legal fees in some federal cases.

Two GOP lawmakers said Monday the proposal, part of their party’s ``Contract With America″ legislative agenda, would discourage frivolous lawsuits and promote settlement of worthy ones.

But a senior Democrat contended it could cause ``tremendous harm″ to ordinary citizens who couldn’t afford to pay big attorneys’ fees.

Meanwhile, a White House official criticized a separate Republican proposal aimed at curbing abuse by federal agencies and regulators by requiring them to do cost-benefit analyses rules before they are adopted.

Sally Katzen, head of information and regulatory affairs in the Office of Management and Budget, called the measure ``extreme,″ overly broad and too costly. ``The medicine prescribed ... will not restore the patient to health and may cause further deterioration,″ she told the House Judiciary subcommittee on commercial and administrative law.

Reps. Jim Ramstad, R-Minn., and Christopher Cox, R-Calif., chief authors of the legal reform measure, said an explosion of abusive and frivolous civil lawsuits is hurting the United States’ competitiveness in world markets.

``Overuse and abuse of the legal system impose tremendous costs upon American taxpayers, businesses and consumers,″ Ramstad testified to the House Judiciary subcommittee on courts and intellectual property.

``I’ve heard from countless small-business owners whose very livelihoods are in jeopardy because of the mere threat of lawsuits,″ Ramstad said. ``Enough is enough.″

In separate statements, Ramstad and Cox cited the coffee case, in which an 81-year-old New Mexico woman won $480,000 in punitive damages after she was burned by McDonald’s coffee she spilled in her lap while in a car.

Ramstad also noted the $2 million damage suit by Leonard McDonald of Thousand Oaks, Calif., who claimed his son Gavin, then 13, was cheated out of the 1987 Ventura County Spelling Bee championship.

The lawmakers said their proposal includes a modified version of the English Rule, which holds losers accountable for the attorneys’ fees of winners in legal cases. Under the GOP measure, losing parties would pay no more than they spent on their own attorneys, and courts could limit awards of legal fees under special circumstances.

The ``loser pays″ rule would apply only in so-called diversity-of-citizenship cases, which are state claims filed in federal court involving parties from different states. Such cases represent an estimated 20 percent of all federal civil cases.

Plaintiffs who did not wish to be subject to the ``loser pays″ rule could file claims in state court.

Rep. Patricia Schroeder of Colorado, the subcommittee’s senior Democrat, said she was troubled by the Republican proposal, which is called the ``Common Sense Legal Reforms Act.″

``We appear to me to be embarking on so-called reforms that have a great, catchy name, but behind that name, the possibility of tremendous harm lurks for the ordinary citizen″ who cannot afford big legal bills, Schroeder said.

Update hourly