Driving Litigation

The Wall Street Journal recently highlighted a lawsuit issue that has increasingly become a problem in many states, including Texas: litigation against trucking companies.

While it is not unusual for plaintiff attorneys to target trucking companies because of the companies’ insurance policies and assets, as the article notes, several factors have led to an increase in these lawsuits in recent years. At least one practice—used by lawyers in Texas and other states to refer potential clients for medical services—may expose the clients to “substantial risk” they may not fully appreciate.

In the cases reported by the Journal, plaintiff’s lawyers refer their clients to cooperative healthcare providers who agree to provide medical care on credit, with the understanding that the provider will be paid from any settlement or judgment reached in the patient’s lawsuit against a person who allegedly caused his or her injury. The healthcare providers agree their medical services will not be billed through Medicare, private health insurance or another third-party payor. This allows the providers—who are cooperating with the plaintiff’s lawyers—to charge inflated rates and provide excessive treatments, all in a scheme to increase the damages sought in the plaintiff’s lawsuit. This can exponentially increase the “actual damages” sought in the litigation. But if the plaintiff does not prevail in the lawsuit, he or she is nonetheless on the hook for the provider’s full bills, something that few plaintiffs realize.

In Texas, several recent trucking cases have resulted in massive “nuclear verdicts,” which in turn are driving insurance rates through the roof for any business operating trucks in Texas, from agriculture to oil and gas. As reported by KFOX, one El Paso trucking company recently reported its rates increased 29 percent in 2019 and another 28 percent in 2020. As we all know, the increased cost of insurance is passed along to consumers in the form of increased prices for goods—yet another example of the Tort Tax at work. We’ve also recently heard a report that a 63-year-old East Texas trucking company recently closed its doors because of its inability to secure insurance. 

We at TLR are working to understand the scope and magnitude of the problem in the Lone Star State. Texans should be able to recover the full measure of damages for an injury caused in an accident when another person is at fault. But it’s clear this balance is being tipped away from justice and fairness in trucking litigation in Texas and other states.