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Lawsuit Abuse Reduction Act Proceeds Through Congress

Legislation designed to help small businesses by reducing frivolous lawsuits in federal courts is making its way through the U.S. House of Representatives.

H.R. 2655, the Lawsuit Abuse Reduction Act of 2013 amends Rule 11 of the Federal Rules of Civil Procedure to strengthen sanctions against parties and lawyers who file unmerited lawsuits. Specifically, the bill:

  1. Reinstates sanctions for the violation of Rule 11;

  2. Requires judges to impose monetary sanctions against lawyers who file frivolous lawsuits, including the attorney’s fees and costs incurred by the victim of the frivolous lawsuit; and

  3. Prevents parties and their attorneys from withdrawing frivolous claims after a motion for sanctions has been served.

Bill sponsors hope that the increased sanctions would discourage frivolous suits and claims, allowing business owners to use resources to expand their business rather than defending lawsuits in federal court. Moore & Van Allen’s Litigation Blog has a detailed explanation of the changes to Rule 11, which could affect all attorneys and parties in federal court.

The bill was recently passed by the House Judiciary Committee and is now pending before the full House. A companion bill, S. 1288, is under consideration by the Senate Judiciary Committee.

#legislativedevelopments #smallbusiness

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