Under the federal structure of the United States, both the federal government and the states have a role in addressing the problem of lawsuit abuse. While federal reform efforts have been slowed by Washington gridlock, many states have taken the lead in advancing effective, commonsense legal reforms – measures that have brought widespread benefits to individuals, businesses and communities.
Legal reform has been an important state issue for several decades. In fact, California’s landmark medical malpractice law was passed in 1975 – nearly forty years ago.
But as the nation’s lawsuit abuse problem has grown, more and more states have chosen to pass reforms. In just the past three years, significant reforms were enacted in Alabama, Florida, Mississippi, Ohio, Oklahoma, Pennsylvania, South Carolina, Texas and Wisconsin, among many others. Read More...
The Texas example is particularly striking. For a long time, the Lone Star State was known as a lawsuit mecca in areas such as asbestos litigation, product liability and medical malpractice.
But starting in 1995, Texas enacted a series of important legal reforms. These included:
- Limits on joint and several liability
- Product liability reforms
- Restrictions on venue shopping
- More rigorous medical causation standards for asbestos and silica lawsuits
- Caps on non-economic damages
As a result of these reforms, Texas’s lawsuit environment has improved considerably. Despite its population increasing by 28% between 1995 and 2007, the number of new tort cases filed in Texas declined by 35% over the same period. In the aftermath of medical liability reforms, the number of lawsuits against hospitals decreased by two-thirds while the number of new physicians increased faster than population growth, particularly in underserved areas and high-risk specialties. The president of the Federal Reserve Bank of Dallas, Richard Fisher, cited legal reform as a major contributor to Texas’s strong economic growth – a growth that spurred more than 40% of net job creation in the United States over the past four years.
This changed environment is also reflected in the Institute for Legal Reform’s ranking of state legal climates. When the first survey was released in 2002, Texas was ranked 46th in the nation with a raw score of 45.2 (out of 100). By 2012, Texas had moved up to 36th and improved its raw score to 57.2 – a 26% improvement.
Texas’s success encouraged many other states to enact reforms. Unfortunately, some of those measures have fallen victim to judicial activism. In Arkansas, Georgia, Illinois and Oklahoma, state supreme courts have defied the will of the voters and thrown out crucial reforms. These setbacks underscore the critical importance of not only good governors and good legislators but also good judges to advancing legal reforms.