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Sen. Banks authors bill to institute ‘Loser Pays’ legal system in Indiana

E-mail from Indiana State Senator Jim Banks:

Sen. Banks authors bill to institute ‘Loser Pays’ legal system in Indiana
Law designed to improve state’s competitive position and curb frivolous lawsuits

(January 13, 2011) – A bill modeled after “loser pays” legal reforms proposed in Texas and other states would improve Indiana’s competitive position, said Sen. Jim Banks (R-Columbia City). The legislation mandates that a plaintiff pays legal costs if his or her lawsuit is rejected by a court.

“This legislation has many positive ripple effects,” Banks said. “Not only will it protect Hoosiers from frivolous claims, but it may also improve the environment for doing business here and attract much-needed professionals to our state.”

Under Senator Banks’ proposal, state law would be changed in two ways:

  • In all civil actions, the court shall award attorney’s fees as part of the cost to the prevailing party. Previously, this was just an option for the court; Banks’ law would make it a mandate.
  • This law specifies the awarding of fees does not prevent a prevailing party from bringing an action against another party for abuse of process, but says the prevailing party may only recover attorney fee costs once.

The senator gave several examples his legislation intends to prevent: A prison inmate suing the state because laws he wanted implemented failed in the Indiana General Assembly; a Little League parent suing the coach because his son’s team lost too many games; a woman suing a fast-food restaurant because she spilled a cup of coffee and discovered it was hot.

“Indiana needs to get tough on lawsuits like these,” Banks said. “By some accounts, Americans now spend more on tort litigation than they do on new cars.”

If passed, Indiana could become the first state to implement “loser pays” legislation in the U.S.

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