Tag: loser pays

New Hampshire Medical Malpractice Reform: ‘Early Offers,’ With a Side Of Loser-Pays

Overriding a veto from Gov. John Lynch, the New Hampshire legislature on June 27 enacted SB 406, establishing the nation’s first “early offer” system for medical malpractice claims. The law establishes incentives for defendants to make offers early in the litigation process that cover plaintiff’s economic losses such as medical bills and lost wages. The early-offer process is at claimants’ option only; claimants are free not to request such an offer. [Kevin Pho; supportive website; trial lawyers’ opposition website]

Importantly, the new procedure also contains pioneering elements of loser-pays in both directions. If a claimant chooses to accept a defendant’s early offer of economic-loss expenses, the defendant will pay an additional sum to reflect a scheduled assessment of pain and suffering, plus the reasonable costs of attorney representation. However, if the claimant invokes the early-offer process but then turns down the offer as inadequate, there is a real risk of a fee shift in the opposite direction:

XII. A claimant who rejects an early offer and who does not prevail in an action for medical injury against the medical care provider by being awarded at least 125 percent of the early offer amount, shall be responsible for paying the medical care provider’s reasonable attorney’s fees and costs incurred in the proceedings under this chapter. The claimant shall certify to the court that bond or other suitable security for payment of the medical care provider’s reasonable attorney’s fees and costs has been posted before the court shall consider the case.

At TortsProf, Christopher Robinette explains in some detail (contrary to an error-filled screed in a Litigation Lobby outlet) why this adds up to a generally good deal for claimants (who, of course, are free not to trigger the process if they disagree) as well as making the system fairer. “Early-offer” proposals have been championed over the years by Jeffrey O’Connell, the distinguished University of Virginia torts scholar, and by Philip K. Howard of Common Good, among others. More on loser-pays here.

[cross-posted from Overlawyered]

[Research assistance: Cato Institute intern Byron Crowe]

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Unanimous Supreme Court Vindicates Market-Based Fees for Civil Rights Claims

It hasn’t happened that much under my watch, but it’s gratifying when the Supreme Court overwhelmingly endorses Cato’s position in a given case.  Not a 5-4 split dependent on what Justice Kennedy had for breakfast or some narrow “win” that doesn’t reach the issues we care most about, but a solid across-the-board victory for our first principles.

But such was the case in Justice Kagan’s (!) opinion for a unanimous Court in Fox v. Vice, in which Cato filed a brief last December that I discussed here:

Private lawsuits challenging government violation of civil rights are notoriously difficult and expensive to bring and win. To address such impediments to the vindication of civil rights, Congress passed a law that, among other things, awards attorneys’ fees to the prevailing parties in certain cases. As noted by the House Judiciary Committee, this was necessary because “a vast majority of the victims of civil rights violations cannot afford legal counsel, they are unable to present their cases to the courts …. [the law at issue, 42 U.S.C. § 1988] is designed to give such persons effective access to the judicial process.” Congress thus harnessed market principles, creating an economic incentive for citizens to vindicate their civil rights directly rather than relying exclusively on enforcement actions by the federal government itself.

In the case of Fox v. Vice, however, the Fifth Circuit ruled that an unsuccessful result on a threshold or procedural matter relating to part of a lawsuit could justify a court order requiring the plaintiff to pay all of the defendants’ attorney’s fees — even those expended to address other, meritorious claims. Such a rule departs from the market-oriented legal structure Congress designed and, if allowed to stand, would significantly harm the ability of plaintiffs to bring private civil rights claims.

Today the Supreme Court essentially agreed 9-0 with our view that (1) the Fifth Circuit’s decision imposes prohibitive costs on civil rights enforcement of civil rights; (2) by prematurely deeming a suit frivolous and ordering the plaintiff to pay the defendant’s fees, the lower court imposed penalties that would shut down legitimate lawsuits midstream; and (3) the Court should not permit fee awards in situations where a plaintiff dismisses a federal claim in order to secure a remand of related state-law claims to state court, contrary to the law’s purpose here.

In short, when a plaintiff’s lawsuit is for both frivolous and non-frivolous claims, a court may grant reasonable fees but only for the costs that a defendant would not have incurred but for the frivolous claims – so no fee awards even for work that goes towards both frivolous and non-frivolous claims.  You can read the opinion here

Thanks to our pro bono counsel at WilmerHale and to the organizations who joined us on our brief: the Liberty Institute, the Independence Law Center, the Institute for Justice, and the James Madison Center for Free Speech.