Voluntary Compensation Plans Must Remain Voluntary

September 27th, 2013, by Mark McCaig

Author’s note: The following originally appeared in the Austin American-Statesman in response to an op-ed column by Texans For Lawsuit Reform President Dick Trabulsi.

Groups engaged in the tort reform movement in Texas, most notably the special interest group Texans for Lawsuit Reform, have spent many years looking for new ways to limit the constitutional rights of individuals who have been harmed by the wrongdoing of another. One proposal that has been recently promoted by tort reform advocates concerns legislation regarding so-called “voluntary compensation plans” that could be set up in the wake of a disaster such as an oil spill or a plant explosion.

There is nothing in the law that prevents a company from setting up a voluntary compensation plan after a disaster. In fact, there are several examples of where companies have set up such plans. Companies that have caused harm to others should be encouraged to quickly and fully compensate their victims. However, voluntary compensation plans should remain truly voluntary to protect the rights of injured parties.

Unfortunately, the scheme being proposed by the tort reform lobby cannot be described as truly voluntary for injured parties. Legislation supported by the tort reform lobby in the past legislative session dealing with voluntary compensation plans should give great pause to anybody concerned about the protection of constitutional rights, particularly the guarantee in the Texas Constitution that “all courts shall be open.”

For example, these bills included provisions that would put an injured party at great financial risk if they chose not to participate in a voluntary compensation plan and chose to exercise their constitutional right to seek a trial by jury. This legislation also included numerous other procedural hurdles that would prevent an injured party from being able to bring their case before a jury. Representatives of groups representing both plaintiffs and defense attorneys vigorously opposed these bills precisely due to the chilling impact they would have on the rights of an individual with a legitimate claim.

Advocates of tort reform defend such legislation by saying that it will streamline the claims process and prevent frivolous lawsuits. In a perfect world, a wrongdoer will immediately and fully pay those they have injured. Unfortunately, we do not live in a perfect world, and all too often wrongdoers are more concerned about limiting their liability than they are about making sure their victims are made whole.

If the voluntary compensation plan proposals supported by the tort reform lobby were to become law, wrongdoers would have a perverse incentive to offer their victims inadequate payments from a voluntary compensation plan because of the tremendous financial risk the victim would face to exercise the constitutional right to seek justice in a courtroom.

Additionally, Texas has strong laws that rightfully prevent the filing of truly frivolous lawsuits. In the rare case where a frivolous lawsuit is filed, judges can and will impose severe sanctions including awards of attorney’s fees. Legislation regarding voluntary compensation plans will not prevent a single truly frivolous lawsuit from being filed in Texas.

The courthouse is often the last place where an injured person wishes to go in order to be fully compensated for the harm done to them. All too often, though, it is the only choice they have. While voluntary compensation plans may be beneficial to injured individuals in some cases, the public cannot depend on such plans to provide proper compensation in all instances.

Texans have seen their right to a civil trial by jury diminished numerous times in recent years under the guise of lawsuit reform. We must not allow a special interest push for “voluntary compensation plans” to further erode this fundamental constitutional right.

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This entry was posted on Friday, September 27th, 2013 at 3:44 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.