Rick Perry’s ‘loser pays’ reform 

There’s only one group less happy about Texas Gov. Rick Perry’s rise than the Romney campaign.

It’s not President Barack Obama’s crew. They think they can paint Perry as a Lone Star wacko whose job creation record is awesome — if you like working with mops and buckets.

It’s not unionized federal workers. If Perry wins, they’ll lean back and gobble muffins until the next liberal president comes along.

It’s not even the secular urban liberals who suspect Perry’s agenda includes mandatory Sunday school and outlawing sex.

It’s the lawyers. For GOP pols, tort reform is a stump speech perennial. Yet, like the weather, Republicans always talk about tort reform but never do anything about it.

But lawyers who annually siphon billions from the economy know that Perry is just crazy enough to actually push it through, because he already has.

Perry enacted medical malpractice reform in Texas, slashing payouts from bogus lawsuits. As a result, the doctors who left after being fleeced in the Lone Star state are flooding back by the thousands.

Then he signed a “loser pays” law letting prevailing parties recover their attorneys’ fees. “Loser pays” rips the guts out of the extortion model of litigation that has made trial lawyers so rich.

The traditional rule is that each side bears its own attorneys fees — and it’s no fun explaining to a small (or large) business client that there is no way to recover the money they paid to beat a frivolous lawsuit.

Perry’s “loser pays” reform turns that paradigm on its head. Plaintiffs’ lawyers usually end up fronting thousands in litigation costs for their clients, while taking no fees unless they recover money — usually 33 percent to 50 percent of the haul.

Litigants who are not paying their own freight have little incentive not to sue on weak cases. They have no skin in the game. But the idea that at the end of trial a winning defendant might present them with a hefty bill concentrates their minds wonderfully.

The dirty secret is that without “loser pays,” defending even meritless lawsuits is so expensive that it is often easier to pay off a bogus claimant than litigate.

Combined with judges and juries who see the law as a way to redistribute the wealth, it’s understandable why so many defendants choose flight over fight.

And it’s equally understandable why lawyers have contributed so much money to the Democrat candidates who protect the current system.

According to Open Secrets, lawyers pumped $234 million into federal campaign coffers in the 2008 cycle, with 76 percent going to Democrats. They spent about $13 million against Perry when he ran for re-election in 2010.

Keep in mind that it’s not just the plaintiffs’ bar that has a dog in this fight. Don’t forget the battalions of mouthpieces, sharks and shysters who make their living decoding tax laws, environmental regulations and labor rules. They would all be unemployed if Perry pushes through his other conservative reforms.

Sarbanes-Oxley, which Perry would take out like a threatening coyote, ought to have been named the “$750 Per Hour Lawyer Full Employment Act.”

Perry is a threat to the comfortable status quo of every lawyer in America, from the name-partner in the Park Avenue corner office to the guy hustling hot coffee cases out of his van down by the river.

And nearly every one of them is going to be digging deep to make sure that the closest Perry gets to the White House is watching reruns of “The West Wing.”

Kurt Schlichter is a civil trial attorney defending companies in California.

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Kurt Schlichter

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