Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SUNDAY, March 12, 1995                   TAG: 9503140037
SECTION: VIRGINIA                    PAGE: B-4   EDITION: METRO 
SOURCE: 
DATELINE:                                 LENGTH: Medium

WHAT GOODLATTE'S BILL WOULD DO

WHAT CASES WOULD BE AFFECTED

Only civil cases in federal courts where the plaintiff and defendant are from different states and more than $50,000 is at stake.

WHAT THE BILL WOULD DO:

A modified "loser pays" system: Requires the loser to pay some of the winning side's court costs and attorney's fees. The loser would pay only those costs the winner incurred in the 10 days before - and during - trial. And the loser wouldn't have to pay the other side's attorney more than the loser paid his or her paid own attorney. Goodlatte says those two provisions protect ordinary citizens suing deep-pocketed defendants.

Encourages settlement. If one side rejects an offer to settle, and winds up winning a less favorable settlement in court, then the side that rejected the offer would have to pay the other side's court costs and attorney's fees.

Example: Smith sues Jones for $100,000. Jones offers to settle for $40,000. Smith balks, counter-offers to settle for $60,000. Jones refuses, and case goes to trial.

If Smith wins and is awarded $60,000 or more, then Jones would also have to pay Smith's court costs and reasonable attorney's fees. If Smith wins and is awarded less than $40,000, then he'd have to pay Jones' court costs and reasonable attorney's fees, because Smith turned down the chance to settle out of court for more than that.

If Jones wins, then Smith would have to pay Jones' court costs and reasonable attorney's fees.

THE PROS

Proponents contend there are too many frivolous lawsuits that "clog up our courts and cost taxpayers millions of dollars each year." They contend the threat of such lawsuits drives up the cost of insurance, and businesses pass those increased costs on to consumers. They say the threat of "loser pays" will discourage frivolous lawsuits and encourage parties that have sued each other to settle their cases before they come to trial, thus holding down costs. Going to court, Goodlatte says, should impose risks on both sides.

THE CONS

Opponents claim the prospect of "loser pays" will discourage ordinary citizens from exercising their right to go to court, especially if they're suing a big company. They also contend that the legislation pressures ordinary citizens to settle cases for less than they deserve, for fear that they'd win a judgment but still get stuck with the other side's legal fees. "Does it encourage settlement or extort settlement?" asks Rep. Robert Scott, D-Newport News. "Whatever happened to the concept of getting your day in court?"

Computer users who want to see a complete copy of the bill and the debate may search the Internet using http://thomas.loc.gov.