Lawsuit Abuse Reduction Act Would Amend Federal Rule of Civil Procedure 11 – Wm. Daniel Davis, Partner, Ichter Davis LLC

On March 20, 2017, the U.S. House of Representatives passed the Lawsuit Abuse Reduction Act of 2017 (“LARA”).  If enacted, the bill would reintroduce mandatory sanctions for filing a frivolous claim and remove the 21-day safe harbor provision, thereby undoing amendments to Rule 11 of the Federal Rules of Civil Procedure.

Currently, Rule 11 gives the courts discretion to order sanctions against an attorney or litigant who brings a frivolous claim.  Under LARA, in such a case, the court would be required to order sanctions in the form of “the amount of the reasonable expenses incurred as a direct result of the violation, including reasonable attorneys’’ fees and costs.” The courts would retain their discretion to order additional sanctions, but LARA clarifies what those additional sanctions might be: “striking the pleadings, dismissing the suit, or other directives of a non-monetary nature, or, if warranted for effective deterrence, an order directing payment of a penalty into the court.”

LARA’s second major change to Rule 11 would be to remove the 21-day safe harbor period that was introduced in 1993.  Currently, prior to filing a claim of frivolous pleadings, a challenged party must receive notice and has twenty-one (21) days to amend or withdraw a challenged claim before sanctions may be imposed.

On March 13, 2017, the Bill was received in the Senate and was referred to the Senate Judiciary Committee.  The Senate has yet to vote.

For further information, please contact Dan Davis of Ichter Davis LLC at 404-869-5261 or ddavis@ichterdavis.com.

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