Potential Litigation Increase or Decrease?

Rep. Lamar Smith (R., TX) has introduced the H.R. 2655, the Lawsuit Abuse Reduction Act, which "[a]mends the sanctions provisions in Rule 11 of the Federal Rules of Civil Procedure to require the court to impose an appropriate sanction on any attorney, law firm, or party that has violated, or is responsible for the violation of, the rule with regard to representations to the court."

The Obama Administration believes that the law will limit the discretion of courts and not reduce litigation, but increase it, and declares that the President would veto the legislation should he be presented with it. The statement goes on to detail their reasons for opposition: 

While H.R. 2655 is intended to curb a perceived increase in frivolous litigation, the bill would actually increase litigation. By creating an automatic financial incentive, and by removing the safe-harbor period, the proposed changes to Rule 11 could dramatically increase the number of sanctions motions, including those filed against Federal government attorneys, and correspondingly increase the risk of financial exposure for any conduct that might be considered a Rule 11 violation. In short, H.R. 2655 would raise the amount and cost of civil litigation and provide more opportunity for unnecessary delay and harassment.

The Administration is particularly concerned that the new requirements could be used to target consumer and civil rights plaintiffs. Consumer abuse and civil rights cases rely heavily on the discovery process to prove the merits of their claims. In addition, civil rights cases often seek to challenge the law or to extend existing precedents. The threat of mandatory sanctions for failure to withstand a Rule 11 challenge could chill meritorious claims by deterring worthy plaintiffs from challenging existing laws or seeking novel interpretations of them.