In this issue...

Health Care In Critical Condition

Consumers Are Caught In Litigation Crossfire

Plaintiff Lawyers Disguising Contributions

2003 Legislative Session

Legislative Alerts

TEXAS HEALTH CARE IS NOW IN CRITICAL CONDITION

Medical malpractice insurance premiums have soared in some cases by 300 percent. In many Texas counties, obstetricians will no longer perform deliveries because of the high cost of medical malpractice insurance. Hospitals are declining emergency care because of fear of lawsuits, and neurosurgeons and orthopedic surgeons are becoming rare in some parts of Texas.

Across Texas, doctors are asking what has happened to the practice of medicine. Good men and women who have devoted years of training and their lives to the medical profession are retiring early or moving to other states.

Two years ago, seventeen insurance companies competed with each other to win the medical malpractice insurance business of Texas physicians. Today, only four remain. The rest have been driven from Texas by ever increasing litigation costs and expanding non-meritorious lawsuits. According to a recent report published by the Texas Department of Insurance, for every one hundred physicians practicing medicine in the lower Rio Grand Valley, there are now three hundred and fifty medical malpractice lawsuits.

Most of these lawsuits ultimately fail, but extract a tremendous price in litigation time and expenses and personal anxiety. Lawsuit costs in the health care industry have become so great that national newspapers and television news programs, as well the American Medical Association, have defined medicine in Texas as a œcrisis.

Trial lawyer front groups blame the insurance companies and demand laws requiring reduced prices from insurers “ a demand guaranteed to drive the four remaining medical malpractice insurers out of Texas.

The truth is that excessive litigation and unreasonable œpunitive damage awards solicited by overzealous plaintiff trial lawyers are the primary problem.

TLR will work this legislative session to save the medical profession in Texas from œdeath-by-lawsuit. While the exact remedy is still being developed by many parties including the Texas Medical Association and the Texas Association of Business and Chambers of Commerce, most agree that highly subjective, non-economic damage awards must be capped at a reasonable level.

California undertook such a change in the mid-seventies and has enjoyed insurance costs below the national level and a stable rate of increases ever since. Some have suggested special courts be designated that are more expert in medical sciences and the acceptable standard of care. Still others have suggested limitations in the contingency fees awarded to lawyers filing malpractice lawsuits, and that clearly frivolous lawsuits result in hefty penalties against lawyers who bring those lawsuits.

TLR is closely studying a number of proposals and will support and push forward responsible legislation. Proposals suggested by Governor Rick Perry earlier this year are modeled after the California statutes. They are constructive proposals designed to get rapid compensation to patients who have been harmed by negligence. They also discourage, and even punish, the filers of frivolous lawsuits. Most importantly, will help ensure that high-quality medical care is available to Texans in the future.

TEXAS CONSUMERS ARE CAUGHT IN THE CROSSFIRE OF LITIGATION

When there is a crack in a city sidewalk or a spot of mold in a school, eventually there may be a lawsuit. Win or lose, we the people are the ones who will ultimately pay. Welcome to the no-man™s land where most consumers live. It is a pockmarked battleground squarely between insurance companies and ever more inventive plaintiff lawyers.

Everyone agrees that when a wrong is done, the harmed should be compensated by those found to be responsible. Unfortunately, the system of civil justice that is supposed to make sure that the harmed are made whole has flaws. Compensation too often exceeds all limits of common sense; theories of damages under the law have become more and more farfetched; and settlements reached and judgments rendered almost always eventually come out of our own pockets.

Who would disagree that a person harmed by a doctor should be compensated? But for every 100 doctors in the lower Rio Grande Valley, there are 350 medical malpractice claims filed. Most of these lawsuits fail, but every legal defense costs thousands of dollars. Who pays? We do. First, the doctors are hit with doubling malpractice premium rate hikes. Next, these higher costs cause consumer health insurance rates to dramatically escalate. And in the end, employers scale back health coverage.

Consumer groups who take funding from trial lawyers simply blame insurance companies. They say insurers want to gouge doctors to make up for insurance company losses in the stock market. But 14 of 17 malpractice underwriters have left Texas in the last two years because they can™t raise rates fast enough to keep up with the litigation costs. It™s pretty tough to gouge your insureds if you aren™t writing policies, so this explanation just doesn™t hold up.

Four years ago, lawsuits alleging harm from mold were virtually non-existent in Texas. In the last two years, however, Texas has seen 40,000 insurance claims for œtoxic mold. Yet internationally respected experts in immunology and microbiology say that the public hysteria manufactured over mold has absolutely no foundation in medical science. These facts have not stopped lawsuits claiming memory loss and neurological damage. It™s an expensive hoax causing insurance rates to double for many homeowners.

After a 32 million dollar œtoxic mold judgment, the ruse swung into high gear. Pictures of mold remediators in environmental œmoon suits inspired thousands of others to seek relief from the supposedly dangerous mold in their homes. Meanwhile, Continuing Legal Education courses are offered on how to best sue on behalf of clients with mold in their homes. Some dubbed the courses, œMold for Gold.

With insurance companies on one side and plaintiff lawyers on the other, some Texas physicians have decided that their profession has become impractical and they are taking early retirement. Many long-term care nurses are fleeing a profession they now see as too risky. For consumers in many counties in Texas, having a baby delivered or finding affordable homeowners insurance is becoming increasingly difficult.

While we may be amused by stories of lawsuits against fast-food companies on behalf of clients who didn™t know that eating burgers, fries, and shakes might make them fat, this is no laughing matter. Billions of dollars of state tax revenues will continue to evaporate unless we tackle the flaws in our civil justice system.

We believe that compensation for œeconomic damages should not be limited, but that highly subjective œnon-economic damages in medical malpractice cases should be capped at a reasonable level. California enacted such a solution in 1975, and medical malpractice rates there have remained stable and below the national average. There are other solutions to this serious problem in which we find ourselves that can go a long way toward restoring common sense to our civil justice system.

For example, we are developing legislation which would act as a disincentive for those who think of a lawsuit as a lottery ticket by encouraging parties in litigation to reach realistic and reasonable settlements early in the process. It is also important that those serving on civil juries understand that lawsuits should make a harmed party whole, not an overnight millionaire.

Our efforts to win fair changes in our system have not stopped all lawsuits, nor should they. But until we all take a stand for a civil justice system driven more by justice than by greed, we can all expect to pay a lot more for every good and service that we buy.

PLAINTIFF LAWYERS DISGUISING MILLIONS IN CONTRIBUTIONS

A new research report by Texans for Lawsuit Reform, entitled Hiding Their Influence, traces the route that $7.3 million in trial lawyer money takes before ending up in the hands of officeholders and political candidates.

Hiding Their Influence is the first in a series of reports by Texans for Lawsuit Reform that will reveal the millions of dollars being contributed to Texas politics by a small, single-interest group.

In the last 18 months, a handful of this state™s most prominent trial lawyers and their law firms put more than $7.3 million into Texas politics, virtually unnoticed. These plaintiff attorneys used a variety of innocuously named political action committees and made a series of complicated transfers from one PAC to another in what appears to be an attempt to cover the source of their contributions.

In the last 18 months, a handful of this state™s most prominent trial lawyers and their law firms put more than $7.3 million into Texas politics, virtually unnoticed. These plaintiff attorneys used a variety of innocuously named political action committees and made a series of complicated transfers from one PAC to another in what appears to be an attempt to cover the source of their contributions.

Hiding Their Influence also documents the $3.3 million contributed by four of the œTobacco Five, the plaintiff attorneys retained by former Texas Attorney General Dan Morales in the state™s lawsuit against the tobacco industry. They include: Walter Umphrey and Wayne Reaud of Beaumont; John M. O™Quinn and John Eddie Williams of Houston; and Harold Nix of Daingerfield.

The four trial lawyer PACs examined in this report “ the Texas 2000 PAC, the Carl A. Parker PAC, the Constitutional Defense Fund PAC, and the Texas Trial Lawyer Association PAC “ transmitted another $3.7 million in contributions.

TLR urges the Texas Legislature to consider a series of proposals outlined in this report that are designed to restore transparency to our political system. These proposals would ensure that the campaign finance system provides the public with accurate information about who is giving and who is receiving money.

To view this report and others online, please visit www.tortreform.com.

Texans for Lawsuit Reform has worked hard over the past several years to encourage the public to support an end to the worst abuses in our civil justice system. In hundreds of speeches to community and professional groups, TLR speakers have revealed the worst abuses in our system and have asked for help in passing legislation to tackle those abuses.

More than 11,000 Texans from over 1,000 trades and professions have agreed to contact state legislators at just the right moment in the process.

In support of their efforts, TLR will conduct the needed research, closely monitor the legislative process, work with legislative leaders and their staff, and communicate with our supporters at key junctures in this process.

At key points during the legislative session, you will receive calls-to-action from TLR called œLegislative Alerts. We will be asking you to communicate as a TLR supporter to targeted elected officials.

There is no more powerful and appropriate communication that a legislator can receive as our leaders consider creating new laws.

Thousands of messages from back home will make a difference and help pass our legislative agenda.

In sum, your response to a call-toaction will determine whether we pass legislation that returns our civil justice system to fairness and balance, or whether bills are passed that continue to expand the lawsuit industry in Texas.

Making the voice of the people heard during the legislative process is the very best way to insure that legislators know, and follow, the will of the people.

When legislators come to Austin to do the work of the people, they are typically pulled in many different directions by various interest groups. One of the most powerful interest groups in Austin represents personal injury lawyers.

This interest group has succeeded in moving Texas far out of the mainstream of civil justice, and has created the reputation that Texas is one of the worst states in the nation in which to conduct business or to find fairness in civil courts.

This legislative session, TLR will strive to make Texas a beacon state that will eliminate abuses in class action litigation, in medical malpractice lawsuits, and in other key areas.

Simply stated, our goal must be to insure that harmed parties are made whole and that lawsuit abuses, often described as œlegal extortion, are finally eliminated.

Making Texas known for fairness and balance in our laws, and as a magnet to business commerce and job creation, will require help from every citizen willing to make our democracy work as it was intended.

We are hard at work finishing our legislative agenda, helping to draft constructive bills, and asking for legislative leadership. We must be ready when the œrubber meets the road in mid-January. TLR supporters must make their voices heard on behalf of real and lasting improvements in our civil justice laws.

TLR™S LEGISLATIVE ALERTS IN THE TWENTY-FIRST CENTURY

Urgent calls-to-action from TLR were once sent to its supporters by mail. But even the speediest mail delivery took days to put those messages in the hands of our volunteers.

Then it took additional days for the message from the citizen to reach their legislator. By the time the legislator heard from the constituent, the fastpaced legislative environment had at times moved on to the next issue.

To make the citizens™ voice in the legislative process heard sooner, we sometimes used phone calls and faxes to communicate Legislative Alerts to TLR supporters.

Those methods have the benefit of immediate communication but require a big investment for every Legislative Alert.

Nothing beats e-mail for immediate communication at low cost. So if you haven™t sent us your e-mail address, or if it has changed in recent months, please contact us at tlr@tortreform.com.

We™d love to hear from you, and you™ll be making our communications system ready for the upcoming legislative session.