The financial impact of tort lawsuit costs on Texas households is becoming increasingly burdensome. Tort costs, which include the expenses associated with litigation, compensation to claimants, and the administrative costs of processing claims, represent a significant and growing weight on the state’s economy. These costs affect everything from insurance premiums to the overall cost of living, making it crucial to understand their impact on Texas households.
Lawsuit Costs in Texas Continue to Grow at Record Rates
As of 2022, Texas’ tort costs reached nearly $38 billion. This translates to an average of $4,594 per household, a substantial financial burden that affects the disposable income and financial stability of families across the state. Notably, Texas is one of the leading states in year-over-year growth in tort costs.
The high tort costs in Texas can be attributed to several factors that influence the state’s legal environment, which is known for significant nuclear verdicts—large jury awards exceeding $10 million. These large awards not only increase the cost of individual cases but also contribute to higher insurance premiums and legal fees, which are ultimately passed on to consumers and businesses.
ILR has been actively involved in researching and advocating for legal reforms to address these issues. Recently, the Texas Supreme Court Advisory Committee’s consideration of rules for third-party litigation funding transparency, supported by ILR, LCJ, and TCJL, marks significant progress in enhancing legal system integrity and combating rising tort costs in Texas. Our recent report provides a comprehensive analysis of the costs associated with the tort system across different states, including Texas. The report highlights the need for continued legal reforms to manage and potentially reduce these costs.
Bottom Line
In conclusion, while tort costs are an inherent part of the legal system, their impact on Texas households is increasingly burdensome. By implementing targeted reforms and promoting a more efficient legal process, Texas can work towards reducing these costs and ensuring a fairer, more sustainable legal environment for its residents.
To view an interactive map of tort costs per household on the U.S. Chamber website, click here.