Patricia Schroeder: “I regret that the time constraints imposed by the rule precluded consideration of the Harman amendment, which replaces…”

“I regret that the time constraints imposed by the rule precluded consideration of the Harman amendment, which replaces H.R. 988's ``loser pays'' provision with the attorneys fees standard in the securities bill. The goal of deterring frivolous lawsuits is a worthy one. However, H.R. 988's loser pays provision goes well beyond that; it gives a wealthy party the power to slam the courthouse door shut in the face of a middle-income or poor individual with a reasonably strong case. The Harman amendment strikes a better balance--it deters suits that are frivolous, but allows ordinary people to pursue close cases. Assume a case in which the damages are high--for example, $500,000-- and the amount of damages is essentially undisputed. However, the defendant's liability is not a certainty. The plaintiff's attorney advises him that the liability question is fairly strong, but it isn't a slam dunk. The attorney estimates that the odds are perhaps 70-30 in favor of winning the liability question. In this kind of case, under our current system, the plaintiff will either win a judgment of something very close to $500,000, or will win nothing. This is clearly not a frivolous case; it is a reasonable case for the plaintiff to pursue, even if, in the end, he loses.”