The Senate today gave final passage to a bill that critics charge is one of the year’s worst assaults on the business community. Senate Bill 117, sponsored by Sen. Bob Bacon, D-Fort Collins, alters the current “loser-pays system” for wrongful firing lawsuits.
The loser-pays system requires the losing party in the lawsuit to pay the legal fees of winner. SB 117 would remove that penalty for employees that lose suits, but leave it in place for employers who lose.
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“This is a bad for business bill,” Sen. Greg Brophy, R-Wray, said. “It can easily derail the life of someone living the American dream of owning a small business.”
“This is an assault on business, and nothing more than a pay-off to the trial lawyers.”
As it originally passed the Senate, the bill exempted employers with less than 50 employees from being affected by the change. House amendments changed that number to 15, so that more small businesses would be impacted.
Bacon argued his bill attempts to give greater access to the legal system to low-income plaintiffs. “What this does it to shield [low-income plaintiffs] from having to pay those costs,” said Bacon. “In the U.S., justice is more assured if you have money.”
Critics of the bill argue that the current system is fair, since it gives no preference to either party in the lawsuit. The proposed change would leave in place an incentive for employers to not fight claims, but removes an incentive against employees filing frivolous claims, they said.
“The loser-pays system discourages employees from filing claims that they know are unfounded, and it discourages employers from fighting claims they know they can’t beat,” said Jeff Weist, director of the Colorado Civil Justice League, a tort reform advocacy group. “It provides the right balance for a fair legal system.”