Substantial benefits from Lawsuit reform

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Texas was known for the lack of fairness and balance in its civil justice system. The distortions caused by these problems significantly eroded the state's competitive position. Fears of excessive litigation and outsized claims were a substantial disincentive for potential corporate locations and expansions.

Lawsuit reform has dramatically improved the fairness and efficiency of Texas' civil justice system. Objective studies now place the state's civil justice system in the upper tier relative to many measures. This notable turnaround, from a legal system that was poorly regarded in several areas to one that is widely recognized as an effective model worthy of emulation, has brought substantial benefits.
The civil litigation environment in Texas was so infamous that it was being called Wild West of Lawsuits. Texas was recognized as a paradise for plaintiffs all over the world. Even the businesses in Texas were considering moving elsewhere to avoid the problems of the state's civil justice system.
The threat of litigation can significantly decrease product innovation because new products have more uncertain safety characteristics and can leave them vulnerable to lawsuits.
Another vulnerable sector is health care delivery. Prior to tort reform, medical malpractice premiums were extremely high, discouraging some doctors from continuing to practice or to perform certain procedures. The supply of doctors tends to be restricted by the higher risk and costs associated with an excessive system, thus further reducing access to health care.
According to Dick Weekley, Chairman of TLR, tort reform in Texas and other states on numerous occasions and has consistently found that the misallocations of scarce societal assets lead to
· Loss of economic efficiency
· Increased risks of doing business
· Cost increases unrelated to productivity
· Escalating insurance rates, particularly in specific areas such as medical malpractice
In a recent study to measure the incremental gains from civil justice reforms clearly demonstrate the economic benefits of the more efficient and effective system.