Sen. Delph has introduced SB 88 which would amend the statute permitting a court to award legal fees to the prevailing party for frivolous law suits or those litigated in bad faith and replace it with language that would require the award of attorney fees to the prevailing party in all cases.
So, this isn’t about frivolous law suits, those are addressed in the current law – this is about a penalty imposed against a party with a meritorious argument that just doesn’t happen to carry the day. I suppose England makes it work, so it’s not an unheard of system; but it is a substantial departure from current practice.
The new language would say “In all civil actions, the court shall award attorney’s fees as part of the cost to the prevailing party.”
So often in these fee shifting cases, you’ll see the tail wagging the dog. The amounts at stake in the underlying claim are fairly trivial or the issues resolvable, but to get to that point, large legal fees are incurred, making compromise impossible and, perversely, generating additional fees as both parties fight like grim death, not because of the substantive issues, but to avoid paying the other guy’s fees.
I can also see it encouraging more litigation in a dynamic where lawyers will be more willing to take on cases for judgment proof clients because they don’t care if they lose — they don’t have any money anyway, but if they win, they can pocket all those sweet, sweet legal fees from the big guy they’re suing. (I see prisoner litigation as a ripe place for this — if you can get a technical victory in 1 out of every 3 lawsuits, you can probably make it profitable.)
The middle class folks would lose biggest from this – people who have just enough to feel it if they lose (maybe some equity in a house) but not enough to withstand the blow if they have to pay $100k in some corporation’s ginned up legal fees because they were paying a partner and two associates to sit in on every deposition. The disincentive for people of modest means to pursue their rights would be significant.
Update There is a bit of a controversy about whether or not this bill being carried by Sen. Delph is part of Governor Pence’s legislative initiatives. It wasn’t on the Governor’s Roadmap during the election! As if that means a thing. The Roadmap was a political document full of unobjectionable pablum designed to convince a disengaged but vaguely supportive electorate not to pay much attention to the race. Stuff Gov. Pence supports and would like to see pass but which would have been controversial and drawn attention to the race would not have found its way onto the Roadmap. That doesn’t mean he isn’t going to push for it.
That said, I don’t pretend to have any insight on whether Pence is pushing it or if Sen. Delph got the wrong idea from a Pence staffer about Pence’s personal enthusiasm for this piece of legislation.