Study: Lawsuit reform has helped local economy

Check out these links for more information about Texans for Lawsuit Reform and the study it commissioned on the impact of lawsuit reform on business activity in Texas:
- www.tortreform.com
- www.tlrfoundation.com

Limits on lawsuit damages since 1995 have helped pump $1.53 billion into the local economy and created nearly 8,000 new jobs, according to a study commissioned by a legal reform group.

But critics and plaintiff advocates question the report's methodology and say tort reform in Texas has made it more difficult for victims of corporate negligence to find justice.

"I think the deck is definitely stacked against small businesses and individuals as it stands right now," said McAllen lawyer and mediator David Calvillo. "Their right to sue in certain areas is slowly being pruned away."

Savings from reduced damages awarded by juries and fewer lawsuits filed against large businesses since the mid-‘90s has created a climate in which medical and insurance companies can expand, the study states. Across Texas, the reforms have resulted in nearly $113 billion in additional annual spending, almost 500,000 new jobs and $2.6 billion a year in increased state budget resources.

Economic benefits were an unforeseen outcome of civil lawsuit reform, said Sherry Sylvester, a spokeswoman for Texans for Lawsuit Reform, which commissioned the study.

"We had no idea that the difference would be as large as it was," she said.

TORT REFORM

State legislators passed a massive legal reform bill in 1995 that capped damages in cases such as asbestos exposure and medical malpractice and have followed up with similar bills in years since.

Seeking to curb the influence of "runaway juries" - which they accused of awarding excessive damages to plaintiffs - the lawmakers hoped to restore a sense of balance to the legal system, said state Sen. Eddie Lucio Jr., D-Brownsville, who was instrumental in fighting for the 1995 bill.

At the time, large insurance companies and medical facilities were hiking premiums and closing down clinics for fear of unwieldy medical malpractice judgments, he said.

But Lucio now fears lawmakers may have gone too far in shifting the balance toward business interests.

"My intention was to swing the pendulum more toward the center," he said. "In terms of medical malpractice reform, I hope we didn't push it too far to the right. We don't want to close the courthouse to anyone."

But Edinburg lawyer Jason Honeycutt says medical malpractice and personal injury lawyers have had to turn away clients at an increasing rate with every new law limiting plaintiffs' options.

In such cases, lawyers typically recoup their fees through a percentage of any damages awarded by a jury. But as government has tied jury awards to a plaintiff's earning potential, it has become harder for lawyers to take on cases of those most in need of free legal representation.

‘JUDICIAL HELLHOLE'

Still, the Rio Grande Valley sustains a nationwide reputation for juries that favor plaintiffs. Last year, the Washington, D.C.,-based American Tort Reform Association described the region as a "judicial hellhole," citing jury action such as the $32 million in damages granted to a widowed plaintiff in Starr County who claimed the blood pressure medication Vioxx killed her husband.

"A lot of people here are not wealthy," said Bill Summers, president of Rio Grande Valley Citizens Against Lawsuit Abuse. "They see a big company that has money and a little guy. No matter who is legally right, they take from one to give to the other."

But Calvillo insists juries here are no different than anywhere else.

"Our juries are like anybody else's," he said. "You've got conservative folks, you've got liberal folks, and you've got hard-working, decent folks.

"The rest is just folklore and legend."
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Jeremy Roebuck covers courts and general assignments for The Monitor. You can reach him at (956) 683-4437.