House Committee Approves Lawsuit Abuse Measure

By July 8, 2011Regulations

On Thursday, the House Committee on the Judiciary approved the Lawsuit Abuse Reduction Act (H.R. 966), known as LARA. The bill would reinstate mandatory penalties for lawyers who file frivolous lawsuits which harms businesses of all sizes. Manufacturers plan on continuing our fight to get this important legislation enacted as law.

Committee approval of this bill is a win for manufacturers.  LARA has several provisions that will protect manufacturers and businesses, particularly small businesses. Some of the highlights of the bill are:

  • Reinstates mandatory sanctions for frivolous lawsuits: Since 1993, when the rules were changed, sanctions have been discretionary.
  • Requires monetary sanctions against plaintiffs’ lawyers who file frivolous lawsuits: Importantly, monetary sanctions will include the attorney’s fees and costs incurred by the victim of the frivolous lawsuit.
  • Removes the 21-day window that allows lawyers to withdraw a frivolous lawsuit: Under current rules, this safe harbor allows frivolous complaints to be filed to attempt to extract settlements for nuisance value without fear of sanctions. 

The trial lawyers’ lobby, the American Association for Justice, is strongly opposed to LARA and will continue to fight against passage of the bill. We commend the committee for their action yesterday in moving this important legislation forward and urge swift consideration by the full House of Representatives.

Erik Glavich is director of legal and regulatory policy, National Association of Manufacturers.

Join the discussion One Comment

Leave a Reply