Smith & Grassley Introduce Bill to Combat Lawsuit Abuse

Senate Judiciary Committee Chairman Chuck Grassley of Iowa and Congressman Lamar Smith of Texas, the former Chairman of the House Judiciary Committee, introduced legislation to reduce frivolous lawsuits that bog down the United States legal system and cost businesses billions of dollars every year.

The Lawsuit Abuse Reduction Act would impose mandatory sanctions for lawyers who file meritless suits in federal court. Federal rules requiring sanctions for frivolous suits were watered down in 1993, which resulted in increased lawsuit abuse. The Lawsuit Abuse Reduction Act restores the mandatory sanctions which hold attorneys accountable for lawsuit abuse. House Judiciary Committee Chairman Bob Goodlatte of Virginia is an original cosponsor of the bill.

“Lawsuit abuse is common in America because the lawyers who bring these frivolous cases have everything to gain and nothing to lose. Lawyers can file meritless lawsuits, and defendants are faced with the choice of years of litigation, high court costs and attorneys’ fees or a settlement out of court. This is legalized extortion. The Lawsuit Abuse Reduction Act restores accountability to our legal system by imposing mandatory sanctions on attorneys who file worthless lawsuits. LARA ensures that our justice system is not just another tool for those who line their pockets by filing frivolous suits. I look forward to working with Senator Grassley to get this good bill passed in the House and the Senate and sent to the president’s desk,” Smith said.

“Law-abiding Americans with a legitimate legal grievance are entitled to their day in court, but unscrupulous attorneys who file frivolous lawsuits stand in the way of valid claims and clog our legal system. Moreover, they end up hurting businesses that must devote resources to unnecessary legal expenses. Putting the brakes on frivolous lawsuits will go a long way towards balancing the scales of justice, upholding the rule of law, and improving the public good. The serious threat of punishment for filing frivolous lawsuits that would be enacted with our bill will help to deter these baseless suits,” Grassley said.

“Frivolous, baseless lawsuits have no place in the courtroom. Innocent victims have been left with legal costs from frivolous lawsuits with no guarantee of compensation, which has formed the basis for the Lawsuit Abuse Reduction Act’s much-needed provisions. The Lawsuit Abuse Reduction Act is an important step in reducing unnecessary and abusive litigation. Attorneys should not be rewarded for filing baseless lawsuits and this bill prohibits such abuse. This bill restores accountability and trust in the legal system, penalizes lawyers for filing baseless lawsuits, and protects victims by a full-compensation guarantee for accrued legal costs. I applaud Representative Smith for introducing this important legislation," Goodlatte said.

Every year, billions of dollars are wasted on frivolous lawsuits, forcing individuals and businesses to spend thousands of dollars on litigation. This ultimately costs jobs and damages the economy because money that could be spent hiring new employees or investing in new businesses is instead directed toward legal fees. The annual direct cost of American tort litigation has been estimated at more than $250 billion.

The Lawsuit Abuse Reduction Act restores accountability to the U.S. legal system by providing penalties for filing baseless, meritless and frivolous lawsuits. Specifically, the bill:

  • Reinstates sanctions for the violation of Rule 11 of the Federal Rules of Civil Procedure, which was originally intended to deter frivolous lawsuits by sanctioning the offending party.
  • Ensures that judges impose monetary sanctions against lawyers who file frivolous lawsuits, including the attorney’s fees and costs incurred by the victim of the frivolous lawsuit.
  • Reverses the 1993 amendments to Rule 11 that allow parties and their attorneys to avoid sanctions for making frivolous claims by withdrawing them within 21 days after a motion for sanctions has been served.

The Lawsuit Abuse Reduction Act is also cosponsored by Senator Marco Rubio (R-Fla.), and representatives Steve Chabot (R-Ohio), chairman of the House Small Business Committee, Trent Franks (R-Ariz.) and Blake Farenthold (R-Texas).

A copy of the bill can be found here.


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