Lawyer: Texas' loser pays law can unintentionally backfire

March 12, 2013 5:02:29 PM PDT
It's an expensive gamble that happens every day in courtrooms across the state. Texans who file a lawsuit and lose could end up owing more than they bargained for -- even after a win.

Tracy Brown is a small business owner. He had a rhinestone design business before he moved in a different direction and has a few more ideas for the future.

But none of his small businesses were law firms. He's not a lawyer and when he went to the courthouse without one, he got burned.

"He fell on a landmine and he didn't know it," KTRK legal analyst Joel Androphy said.

Brown sold some rhinestone design sheets to a customer who wasn't happy with the work and stopped payment on her check. They couldn't work it out and Brown filed suit to get paid.

"To me, it was an open and shut case," Brown said.

One of the counts was thrown out. He lost one more, but won the other two.

"They awarded me close to $300," Brown said.

He thought it was a winning day at the courthouse -- 2-1. But then he lost a lot more.

"Seven-thousand dollars," Brown said. "I won a few hundred dollars, and the judge granted them attorney fees."

It's a surprise to him. But it came as no surprise to the other side's lawyer, Robert Whitley.

"That's just the way it is," Whitley said.

"Is it a good law?" we asked him.

"I think in this case, it did what it was designed to do," he said.

If you lose certain types of cases in Texas, you pay for the other side's lawyer, and Brown will. After a recently decided appeal, the legal bill is now $10,000.

And ironically, he isn't the only one who thinks it's a problem.

"I am not a big proponent of loser pays," Whitley said.

Whitley represents Brown's opponent and isn't giving up on getting his fees. But he says the law helps people who can afford their own lawyer.

"It helps people with deep pockets," Whitley said.

"Which is not necessarily who the courthouse was designed to help?" we asked.

"The courts should be designed everybody," he replied.

Androphy thinks these types of situations are an unintended consequence of the loser pays law.

"People shouldn't have to have a lawyer to right a wrong, or to pursue a case for a principal," he said. "Everybody has that right. You should not have to be a rich person to pursue that right.

If Brown had hired his own lawyer, the fees likely would've recovered fees for the counts he won but Texas law doesn't award fees to people who represent themselves.

Likewise, if he'd gone to small claims court, it probably would've cost just a couple hundred buck. He didn't and that's his right but now he'll pay.