Tort Reform in Texas --- Opinion in Brief

Report From the States

Tort Reform in Texas --- Opinion in Brief

The Federalist

Armed with billions of dollars from settlements in the tobacco lawsuits and other big money cases, trial lawyers are seeking to discredit and take away many of the benefits of tort reforms adopted around the country in recent years. Fortunately, a new Texas study is providing facts to combat their campaign of disinformation.

The study, conducted for Citizens for a Sound Economy by The Perryman Group, an economic research and analysis group based in Waco, Texas, looked at inflation, personal income, job creation and other economic factors to determine the success and benefits of tort reforms championed by George W. Bush and passed by the Texas Legislature in 1995.

The overall impact of tort reform on the Texas economy, including all direct, indirect, and induced effects, is estimated for 2000 to include: $23.207 billion annual total expenditures; $11.601 billion in annual gross state product; $7.056 billion in annual personal income; $2.901 billion in annual retail sales; and 195,727 permanent jobs.

The benefits represent about 5.64 percent of aggregate income growth; 5.32 percent of overall output expansion; and 11.4 percent of net job creation over the 1995-2000 period. In addition to these specific effects, legal reform was a notable factor in creating a better environment for economic development within Texas.

Moreover, based on the analysis of economic development patterns within the state, tort reform was a notable (although not necessarily the sole or primary) factor in the creation of 295,151 permanent jobs in Texas over the past few years, above and beyond the 195,727 jobs attributable to legal reform.

For consumers, this means that legal reform in Texas has had a direct and positive impact on their lives. The savings to the typical Texas household in terms of lower prices and increased total personal income amount to $1078 annually, and those savings are projected to grow over time.

Tort reform has also cleared many questionable cases from court dockets, giving citizens with true grievances greater access to the courts. Perryman notes that "dockets are less crowded, and legitimate cases are handled more expeditiously."

Trial lawyers appear ready to do anything they can to muddy the water so they can attack both the reforms and the reformers, but this study makes it crystal clear that consumers and businesses benefit in their pocketbooks and in the courts with civil justice reforms.

Source: The Federalist 01-13/14 Brief, March 27, 2001, pp. 4-6. http://www.federalist.com.