'Loser-pays' bill slammed

A bill that proposes to make the loser pay attorney fees in a civil suit was met with protest by two attorney organizations, which say the measure would shut out low to middle-income people from seeking justice.

But SB92 sponsor Sen. David Thomas, R-South Weber, said his bill would shut down frivolous lawsuits, telling fellow members of the Senate Judiciary, Law Enforcement and Criminal Justice Standing Committee this past week that the bill would create real consequences for people who use the courts for intimidation or extortion.

"Loser-pays works in a more positive way more often than not," Thomas said, pointing out that Europe has a loser-pays system, as does the state of Alaska. Thomas said the bill would also help to make Utah "more business friendly."

However, some attorneys told the committee that such a change would shift interest in courts away from winning on the merits of a case to winning for the sake of attorney's fees.

"It's ultimately harmful to people," said Roger Hoole, vice president of the Utah Trial Lawyers Association. Hoole said Utah has no real problem with a flood of frivolous suits but said SB92 could actually end up creating a "cottage industry" of litigation for the sake of going after attorney fees.

John Fay, trial lawyers association president, said the result would be attorneys filing more motions, challenging whether or not awarded attorney's fees were reasonable, creating more work for judges. Under current law, attorneys can ask a judge for an award of attorney's fees, but it is not automatically awarded.

John Nielsen, a lobbyist with the Utah State Bar, said the bill could also discourage lower-income people from suing large companies for threat of having to pay huge sums in attorney's fees should they lose. Representatives with the insurance industry also expressed concern that the bill would cause more work for courts.

Other citizens testified against the bill. Other than Thomas, no one testified in favor of the bill.

Assistant State Court Administrator Rick Schwermer said the courts would not take a position on the bill, but judging from the bill's language, Schwermer estimated the decrease in frivolous suits would be balanced out with increases in motions over attorney's fees. "Workload-wise it would be close to a wash," Schwermer said later.

Committee member Sen. Patrice Arent, D-South Cottonwood, said although she applauded Thomas' goal to limit frivolous suits, she had real concerns about the bill's unintended effects.

Sen. Gregory Bell, R-Fruit Heights, said the bill illustrated the frustration attorneys have had on judges' reluctance to award attorney fees in civil cases.

Committee members passed the bill with a favorable recommendation, with Arent voting against. Thomas agreed to rework the bill to address concerns before taking it to the Senate floor for debate.

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