Op-Ed: Stephen Moore: America’s Tort Tax Is Hurting Consumers. Reform Can Fix That (Washington Reporter)
What happened: A profit-driven model of litigation—fueled by contingency fees, third-party investors and nuclear verdicts—is distorting the civil justice system and ultimately imposing a considerable tort tax on all hardworking Americans. Read more
What happened: A profit-driven model of litigation—fueled by contingency fees, third-party investors and nuclear verdicts—is distorting the civil justice system and ultimately imposing a considerable tort tax on all hardworking Americans. Read more
By the numbers:
The U.S. Chamber of Commerce Institute for Legal Reform estimates that lawsuit abuse adds nearly $5,000 per year to the average American family’s expenses.
Texas had the fourth-highest number of nuclear verdicts (awards exceeding $10 million) in the country between 2013 and 2022, with more than 130 such judgments.
Legal system abuse costs the U.S. economy approximately $529 billion annually, roughly 2 percent of the country’s GDP.
Tort costs are rising at an alarming 7.1 percent per year, outpacing inflation.
In Florida, legal reforms led to a nearly 24% drop in insurance-related lawsuits over two years.
TLR Thoughts: Legal system abuse doesn’t just hurt defendants—the corrupt behavior of certain personal injury attorneys drives up prices, erodes public trust and weakens our economy. In Texas, TLR continues to advocate for meaningful reforms that will help curb the proliferation of meritless and excessive lawsuits, maintain a predictable and affordable insurance market for all, and restore fairness and transparency to Texas’s courts.
What happened: Delaware’s long-standing dominance as the go-to state for corporate litigation is facing growing competition, as Texas, Oklahoma and Nevada move to attract businesses with new courts and more predictable legal environments. Read more
Tell me more: Frustration with recent Delaware court decisions and rising uncertainty around shareholder litigation has prompted several high-profile companies to relocate their incorporation to more pro-business states.
What about Texas: Texas has already opened its specialized business court and enacted TLR-backed, bipartisan legislation that raises the threshold for filing shareholder derivative lawsuits, limits certain shareholder records requests and provides greater legal protections for corporate officers and boards.
TLR Thoughts: TLR is proud to support legislation that ensures Texas remains the best place in the country to do business. The reforms adopted during the 89th Texas Legislative Session are part of a long-term, strategic effort to make Texas the preferred home for companies that value legal clarity and a fair and efficient civil justice system.
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