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Richard Weekley: Texas Ranks "Best in the Nation" in Tort Liability Index but Report Shows More Reforms are Needed, May 15, 2006

A cutting edge report just released shows that while Texas still has some glaring civil justice problems to address – most notably the state’s notorious “judicial hellholes” – Texas tort reforms have strengthened the state’s economy in a variety of ways and are improving the quality of life for every Texan.

For example, the benefits of the medical liability reforms in HB 4 enacted in 2003 became apparent almost immediately, particularly in South Texas, where doctors had become increasingly scarce and specialists were practically non-existent.

Liability insurance rate relief turned that situation around and doctors are now establishing practices in previously underserved areas throughout the state. The Texas Medical Board is anticipating a record 4,000 applications for new physicians’ licenses next year – twice last year’s total and 30 percent more than the previous best year for the state.

But improved patient access to health care and lower insurance costs for doctors, hospitals and nursing homes are not the whole tort reform story.

The Pacific Research Institute (“PRI”) in San Francisco has completed the first “U.S. Tort Liability Index: 2006 Report,” a comprehensive analysis comparing the tort systems of all fifty states. After weighing 39 variables ranging from caps on punitive damages to appeal-bond caps, Texas was ranked best in the nation. Had the study been done before the 2003 tort reforms, researchers say the state would have ranked 26th.

A fair and predictable civil justice system is key to our state’s strong economic competitiveness. Texas reforms have already started to bring about lower prices, higher job creation, better wages, and more product innovation throughout the state.

Texas ranked highest (best) in categories of the study that measured declining financial losses linked to non-meritorious lawsuits. Hospital liability insurance costs drive this point home. After a 54 percent rate hike in 2003, Texas hospitals got a 17 percent cut in 2004 and more premium reductions have followed.

Thirty new companies are now writing physician liability coverage in Texas and Texas doctors are expected to save $42 million on their 2006 liability insurance premiums.

Non-meritorious health care lawsuits have been cut in half and hospital savings are being plowed into a variety of health care service enhancements ranging from the development of electronic medical records systems to the recruitment of more specialist physicians.

Nationally, the researchers at PRI found that excessive tort costs in the United States impose a “tort tax” of $2,654 per year for a family of four. But Texans are now paying a smaller “tort tax,” due to our lawsuit reforms, and this should improve since there are still many lawsuits in the system that commenced before the reforms took effect.

It is important to note that the PRI study is not all rosy for Texas. The report particularly lamented Texas’ “judicial hellholes” – those courthouses in the state that plaintiff attorneys choose to file lawsuits because they consider the judges and juries to be particularly “friendly” to their claims. These “judicial hellholes,” two of which are identified as the Rio Grande Valley and the Gulf Coast of Texas, are described in the report as far more likely to grant improper certification of class action law suits, to allow the presentation of junk science and other improper evidence to the jury, and to tolerate strong alliances between plaintiffs’ lawyers and judges. The U.S. Chamber of Commerce and the American Tort Reform Association also criticize Texas for allowing these “judicial hellholes.”

Texas ranked last (worst) on several other factors measured by the tort liability study, including the state’s failure to impose limits on attorneys’ contingency fees and the failure to inform jurors about payments made to the plaintiff from various sources, such as payments received from insurance companies or government programs such as Medicare.

Our partisan election of judges also earned Texas the worst rank of “50” on the liability index. According to the report, “when judges act as politicians in robes, the civil-justice system is further eroded.” Certainly, most men and women of high integrity and sound judicial temperament loath the need to solicit campaign funds in order to win or hold a judicial position.

The report should make all TLR supporters proud of the reforms that we have advocated, but the pressing concerns highlighted in the report must also steel our commitment to finishing the work of lawsuit reform in Texas. The U.S. Tort Liability Index highlights key incentives for creating a fair and balanced civil justice system – the integrity of the system itself, economic prosperity, and a better life for every Texan. Much has been done, but there is much yet to do.

Richard Weekley is Co-Founder, Chairman and CEO of Texans for Lawsuit Reform, a statewide organization dedicated to bringing fairness and balance back to Texas’ civil justice system.