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Austin, Texas — With the stroke of a pen on June 11, Gov. Rick Perry signed into law a comprehensive reform bill that could change the civil litigation landscape in Texas. Rep. Joe Nixon, a Houston Republican who authored House Bill 4, says he expects Texas to see less litigation because of the new law. “If we’ve done our job right, both plaintiffs and defense lawyers will have less work,” Nixon, a partner in Houston’s Phillips & Akers, says. But some don’t think H.B. 4 will decrease litigation. Plaintiffs attorney Mike Slack, a partner in Austin’s Slack & Davis, says, “It does nothing to address frivolous lawsuits — what originally was hailed as the reason for doing all this.” What the law does do, Slack says, is “take the heart out of significant cases.” One area that the new law is expected to affect the most is medical malpractice, where noneconomic damages will be capped in actions brought after Sept. 1, the effective date of a majority of the bill’s provisions. “I think it will revolutionize the way that medical-malpractice cases are screened, analyzed, prepared and tried,” Terry Tottenham, a med-mal defense attorney, says of the new law. But Tottenham, an Austin partner at Fulbright & Jaworski, foresees a number of court challenges. Years of litigation and court interpretations followed passage of the Texas Medical Liability and Insurance Improvement Act in 1977. In 1988, the Texas Supreme Court held in Lucas v. United States that the caps created by the 1977 law violated the open court guarantees in the Texas constitution. State lawmakers kept that case in mind when they turned their attention to damage caps this year. A constitutional amendment to be submitted to voters in September authorizes the Legislature to set caps on damages. In the event the amendment fails, H.B. 4 has a quid pro quo provision designed to make the caps pass constitutional muster with the high court. Under that provision, the caps in the bill are applicable to health-care providers who carry certain minimum levels of liability medical-malpractice insurance coverage. The new law sets a $250,000 cap on the total liability of all doctors or nurses individually named as defendants in a suit. A second $250,000 cap will apply to a defendant hospital, nursing home, or other health-care institution. A plaintiff potentially could recover $250,000 more if another health-care institution is sued, with total recovery limited at $750,000 under the new law. Nixon says he expects that, from a practical standpoint, noneconomic damages will be capped at $500,000 in most cases, because it’s unlikely that a plaintiff can show that an injury was the result of negligence by two institutions. Tommy Jacks, a plaintiffs attorney who specializes in med-mal cases, says the caps will force him to be even more cautious than he has been in the past about accepting cases. In addition to looking at whether a plaintiff can expect a recovery based on the facts of a case, he’ll take a close look at the amount of economic damages that could be recovered, says Jacks, a partner in the Austin office of Mithoff & Jacks. Figuring into the equation will be the costs of preparing and trying a med-mal case, Jacks says, noting that his firm spends, on average, a little more than $100,000 per case on things such as discovery and expert witnesses and some cases have cost as much as $300,000. Faced with those kinds of expenses and limits on recovery, some injured parties aren’t going to find lawyers to take their cases, plaintiffs and defense lawyers say. Spencer Markle, a former defense lawyer who now represents plaintiffs in health-care liability cases, says the new law discriminates against children, stay-at-home moms, the poor, and the elderly, who aren’t going to have much, if any, economic losses. If a mother who doesn’t work outside the home is the victim of a physician’s alleged malpractice, her family can expect to recover only about $250,000, making it hard for an attorney to take the case, says Markle, managing attorney in the Houston office of Morgan & Weisbrod. “So that family is going to go without a remedy,” Markle says. This article was distributed by the American Lawyer Media News Service. Mary Alice Robbins is a senior reporter at Texas Lawyer.

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