The Lawsuit Abuse Reduction Act (LARA) bill is working its way through Congress. The bill will amend Rule 11 of the Federal Rules of Civil Procedure (FRCP) to mandate that courts impose sanctions on parties that file what are determined to be “frivolous” civil lawsuits. Under the current version of the law, defendants who are named in these often unsubstantiated claims will no longer need to notify the plaintiff 21 days prior to filing a motion for sanctions against them. The present “safe harbor” period provides the plaintiff time to withdraw the complaint and avoid the potential sanctions and penalties from bringing meritless claims. The Center for Justice Democracy explains that rather than giving judges the discretionary option to determine if sanctions are appropriate, they would be restricted by a mandate to do so.
Thomas Susman, Director of the American Bar Association, has formally expressed opposition to the legislation based on three core reasons:
The Rules Enabling Act: This legislation would bypass the Act that amendments to Federal Rules should be executed after an appropriately conducted fact-finding process by the judiciary. The Rules Enabling Act has been a long-standing and respected process that reinforces the separation of powers and also:
- Ensures that the judiciary remains an active participant involving in any changes to evidentiary rules or court procedure
- Individual rules are each a small segment of an interwoven system that is worthy of proper consideration when changed
- That judges have unique and critical perspectives and opinions regarding the potential outcomes to changes to Federal Rules
- The lack of evidence that Rule 11 is not adequate: LARA supporters feel that frivolous suits are hindering the economy and slowing job creation. To support this view, they cite mostly unreliable, yet memorable suits. Overall, there is a lack of solid evidence to support this theory. The “safe harbor” that is in place effectively encourages withdrawing frivolous claims up front, at the outset of litigation.
- There is potential risk that LARA could hinder the system by encouraging more legislation, costs and delays: Little evidence suggests that LARA would be a deterrent to frivolous suits. During the past period where mandatory sanctions existed, the additional Rule 11 claims consumed a great deal of valuable resources and time.
Susman further explained that the Rule 11 put in place in 1983 also lacked truly comprehensive and thoroughly analyzed data. It created documented results that were unintended and he encouraged the legislature to not make a similar error. He feels that adherence to the Rules Enabling Act instituted by Congress will deliver the best outcomes. The ABA says they appreciate that those in Congress have concern for the potentially negative results stemming from frivolous lawsuits; however, believe that the problem and potential remedies are worthy of much greater comprehensive review.