Mississippi Malpractice Insurer Says More Tort Reform is Unnecessary: Plaintiffs’ Attorneys Foresee “Loser-Pays” Will Curb Frivolous Litigation

Texas Governor and presidential hopeful Rick Perry has publicly touted the success of his state’s “loser pays” law and it appears that quite a few elected officials are taking heed. In fact, Mississippi’s Governor-elect, Phil Bryant, may just have his eye on similar tort reform, and there’s a high probability that such legislation would pass, reports Jackson, Mississippi’s Clarion-Ledger. This comes as no surprise to Mississippi medical malpractice attorneys, who know tort reform like this will be a hot-button topic in the upcoming election, and it’s something that potential plaintiffs want to keep an eye on. It has made its way back to the forefront of discussion as concerns about government spending and health-care costs have incited lawmakers to explore cost-saving measures.

This particular law is intended to be a blow to trial lawyers and curb instances of frivolous lawsuits by requiring the loser of a lawsuit to pay the attorney’s fees of the victor. Currently, in the U.S. each party bears the brunt of its own legal costs in court. Medical Assurance Company of Mississippi, which provides medical malpractice coverage to half of Mississippi’s physicians, says such reform is in itself frivolous since the state, which was once labeled a “poster child for lawsuit abuse,” has already seen a marked decline in lawsuit filings, approximately 73 percent in eight years.

Mississippi College of Law professor Jeffrey Jackson claims that in addition to being an unnecessary undertaking for the state, “loser pays” reform would put a much greater risk on the individual seeking to recover, and encourage the injured to settle for much less than their claim is worth. Even a winning plaintiff might still be on the hook for legal fees, if the amount the jury awards is significantly less than the previous settlement offer.
However, there’s also the potential that “loser pays” would only truly be detrimental to plaintiffs seeking to recover based on low-merit claims. As a matter of fact, “loser pays could [indeed] be an important part of a larger effort to reduce litigation costs, better compensate prevailing litigants, and better align tort law with its goal of deterring socially harmful conduct,” according to a 2008 civil justice report and study conducted by the Manhattan Institute for Policy Research.

Furthermore, the report’s suggestion that tort reform would contribute to deterring socially harmful conduct highlights yet another prospective upside to “loser pays” – something called the “compliance effect.” In a nutshell, this means potential defendants will strive harder to comply with the law, especially when faced with having to compensate a triumphant plaintiff with a strong case for his/her legal fees. Therefore, it becomes cheaper for likely offenders to obey the law, and more expensive to flout it through negligence. To many people, this sounds a lot like justice, something citizens often fear the judicial system lacks. It’s also an indication that states value businesses, as well as the individual.

Other options to “loser pay” are being explored as well. For instance, in May, a writer for the Economist said, “Congress is considering a bill that would cap awards and lawyers’ fees and put a three-year statute of limitations on medical-malpractice claims. According to a report from the Congressional Budget Office, the measure would reduce the federal government’s health spending by $34 billion between 2011 and 2021.” As a part of the study mentioned earlier in this article, the Manhattan Institute proposed that a modified offer-of-judgment rule be incorporated into “loser pays,” as a way of assuaging lingering doubts about its benefits. This rule apportions the amount of any fees awarded to the size of the parties’ settlement offers, making it easier to establish a “robust litigation insurance industry in new loser-pays jurisdictions.”

I’m sure that in Mississippi, attorneys plan to keep their eyes on the political arena and see what results.

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