House bill sanctions lawyers for filing frivolous lawsuits

A bill aimed at capping noneconomic damages in medical malpractice lawsuits is still stalled in the Senate, but the House has passed another measure that some believe will help reform the legal system another way: Reducing frivolous lawsuits.

Lawmakers on Sept. 15 approved the Lawsuit Abuse Reduction Act in a 229-174 bipartisan vote. The bill would apply to all lawsuits and was not passed specifically to address medical liability insurance problems.

The measure's proponents say it would prevent "venue shopping" by requiring that lawsuits be filed where plaintiffs live or where they were injured, or where the defendant's principal place of business is located.

They also believe it would deter lawyers from filing meritless charges by suspending their licenses if they bring three or more frivolous lawsuits in the same federal court. Doctors consider both to be problems that factor into rising liability insurance rates.

"Frivolous lawsuits bankrupt individuals, ruin reputations, drive up insurance premiums, increase health care costs and put a drag on the economy," the bill's author, Rep. Lamar Smith (R, Texas), said in a statement. "The gaming of the system by a few lawyers drives up the cost of doing business and drives down the integrity of the judicial system."

The American Medical Association had not taken a position on the bill at press time. The Association is continuing to look at it.

The House legislation also calls for:

• Imposing mandatory monetary sanctions against attorneys or parties who file frivolous lawsuits.
• Removing a "safe harbor" provision that now allows plaintiffs and their attorneys to avoid sanctions if they withdraw meritless suits within 21 days.
• Empowering judges to order plaintiffs to reimburse defendants for attorney fees and reasonable litigation costs.

At press time, it did not appear that the bill was headed for success in the Senate.

The American Tort Reform Assn. believes the measure would be helpful for society.

"This commonsense civil justice reform would remove two of the biggest thorns in the side of the U.S. judicial system -- frivolous claims and forum shopping," said ATRA President Sherman Joyce.

But some question the notion that the proposed changes would help. Businesses want Congress to believe the bill is about eliminating frivolous lawsuits, but nothing could be further from the truth, said Carlton Carl, spokesman for the Assn. of Trial Lawyers of America.

ATLA believes the bill would benefit foreign and American corporations with principal places of business overseas by making it more difficult for people to hold them accountable in court. It also said that making sanctions mandatory revives a law that didn't work when it existed between 1983 and 1993.

The group referenced a July 9, 2004, letter from the Judicial Conference, the policy-making body of the U.S. courts, that said mandatory sanctions were repealed because they were abused.

"This is not a bad idea, but it simply does not work in actual practice," the ATLA stated.