Lawsuit Reform is Good for Texas Consumers

by Leo Linbeck Jr.

For five months every two years, Texans get the chance to actually see if their legislators are true to the principles and promises made in their campaigns. But those who oppose the promises made by these elected public officials, and whose candidates lost their elections, often wage misinformation campaigns to intimidate legislators from making good on their campaign commitments.

These opponents will try to win in the 2003 Legislature what they lost in the November 2002 elections. The misinformation campaign against the effort to rein in abusive litigation is a perfect example.

The overwhelming majority of elected officials believe that Texas should have a fair and balanced civil justice system, one in which neither the plaintiff nor the defendant has an unfair advantage. But a certain group of personal injury lawyers makes literally billions of dollars by making sure the system is biased in their favor. So they call lawsuit reform “anti-consumer,” and characterize reform as “the slamming of the courthouse door” or as “limiting lawsuit.” But the fact is that well-crafted and well-reasoned tort reform is pro-consumer.

Look at a few of the issues:

Medical malpractice reform: Many doctors are leaving Texas, or even leaving their profession, since they can no longer afford the risk of practicing medicine here. Those remaining pay huge medical insurance premiums, which then show up in higher health- care costs and premiums for consumers. It is pro-consumer to protect the award of economic damages in medical malpractice cases but to cap highly subjective non-economic damages, also known as “soft damages,” so that Texans can have accessible, affordable health care. It is anti-consumer to allow a few plaintiffs and plaintiff’s lawyers to hit the “lottery” and win millions at the expense of the rest of Texas consumers.

There is no “free lunch” for consumers in medical malpractice. When someone is awarded $20 million, that cost is spread among all the rest of insurance consumers. The goal of litigation should be to fully and quickly compensate injured parties, not to make a few people and their lawyers instant millionaires. Also in the health care consumer’s interest, we strongly support strict enforcement of medical standards of practice to protect patients from rogue practitioners.

Class action reform: Virtually every lawsuit that a judge allows to be certified as a class action is settled because the defendant cannot afford the risk of trying such a lawsuit, even if the defendant is totally innocent. Texas juries never get to decide class-action lawsuits on their merits. Outrageous settlement costs are often nothing more than legalized extortion, and are reflected in higher costs for the products and services we all buy, lower returns on pensions and 401(k) plans, and fewer job opportunities for Texans.

It is pro-consumer to make class certification appealable to the Texas Supreme Court so that a consistent and equitable body of law can be created by the court.

Fair settlements: What stops people from using lawsuits as a way to harass, punish and extort money from people or companies? In Texas, the answer is “almost nothing.” Our courthouses are filled with cases that should not be there, and hundreds of millions of dollars are spent on costly and unnecessary pre-trial motions, discovery and legal fees. It is pro-consumer to institute a system in which a plaintiff who refuses to settle a case for a reasonable amount and then wins less than that amount is penalized by paying the other parties’ legal fees and costs out of the proceeds of any judgment. It is also in the consumer’s interest to create a system in which defendants have an incentive to offer full and early settlements.

There are many other badly needed, common-sense reforms to our legal system that will be debated this legislative session. These reforms will be opposed by those who profit from the system as it is today. But when you hear lawsuit reforms called “anti-consumer,” look behind the attacks to the facts. Returning our court system to a place where it is appropriately used as a last resort to resolve legitimate disputes is good for the overwhelming majority of Texas’ consumers.