- The Washington Times - Wednesday, October 26, 2005

The Lawsuit Abuse Reduction Act of 2005, or LARA, is expected to come to the House floor for a vote today. Since this bill would actually accomplish what its name suggests, we hope it passes by an even bigger margin than it did last year, when it passed 229-174 but stalled in the Senate. LARA isn’t perfect, but it would help reduce the estimated $3,380 “tort tax” that American households pay in higher prices each year because of frivolous lawsuits.

LARA’s most important change puts teeth back into a civil-procedure rule that holds lawyers accountable for frivolous lawsuits. In 1993, Congress made sanctions on such lawyers optional, thus helping to spur the proliferation of baseless lawsuits. It also gave a 21-day “safe harbor” period to plaintiffs to withdraw a lawsuit if they so wish without the possibility of sanctions. These moves tilted the playing field toward plaintiffs. They are corrected by LARA, which requires a lawyer or his law firm to hand over his attorney’s fee to the defendants if a lawsuit is determined to be frivolous and gets rid of the “safe harbor” period. The first creates a clear financial disincentive for lawyers who bring dubious cases to court; the second takes away some of the bluffing power frequently used to force out-of-court settlements.

The other important change is a provision that prevents “forum shopping.” In the worst abuses, lawyers scout out the most lax districts irrespective of where the alleged harm occurred or the place of residence or business of parties. These jurisdictions are all over the place, as the American Tort Reform Association’s annual “Judicial Hellholes” report shows. LARA requires plaintiffs to file suit in their own jurisdictions, in the places where the harm occurred or where the defendant does business.

The bill isn’t perfect; some of its provisions appear to raise constitutional questions. One section directs state courts to determine whether a case substantially affects interstate commerce and thus invokes the new LARA rules. Congress has the power to regulate interstate commerce, but where does it get the right to order state courts around on matters of civil procedure?

There is more good than bad in this bill, however, which is why nearly everyone except a subset of unscrupulous plaintiffs’ lawyers and their lieges in Congress like this bill. The American Bar Association opposes LARA, but half-heartedly, and will probably be able to live with it were the Senate ever to get its act together.

The high cost of frivolous lawsuits is a national embarrassment. LARA would make it less embarrassing and less costly.


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