The House Judiciary Committee approved a bill on Wednesday that would reduce the amount of frivolous lawsuits that plague the U.S. legal system.
The Lawsuit Abuse Reduction Act was introduced Rep. Lamar Smith (R-Texas) in July. Smith said it would restore accountability to the legal system by imposing mandatory sanctions on lawyers who file worthless lawsuits.
“Lawsuit abuse is common in America because the lawyers who bring these frivolous cases have everything to gain and nothing to lose,” Smith said. “Lawyers can file meritless lawsuits and defendants are faced with the choice of years of litigation, high court costs and attorneys’ fees or a settlement out of court.”
The annual direct cost of tort litigation in the United States is higher than $250 billion.
Frivolous cases are stumping the economy because companies are loosing money that could be spent on new hires or investing in new businesses as opposed to spending money on legal fees, according to Smith.
The Lawsuit Abuse Reduction Act would reinstate sanction for the violation of Rule 11 of the Federal Rules of Civil Procedure. It would also ensure that judges impose monetary sanctions against attorneys who file frivolous lawsuits.
The proposed bill was approved out of committee in a vote of 17-10 and awaits consideration before the full House.