The trucking industry is responsible for moving 70% of freight across the country. Truckers keep our economy moving and are essential to our supply chain. The industry is grappling with many issues that are contributing to delayed deliveries and empty store shelves, including labor shortages and record-high gas prices. One little-discussed issue making the supply chain crisis worse? Lawsuits against the trucking industry.
We invited Lee Parsley, general counsel at Texans for Lawsuit Reform, onto ILR’s Cause For Action podcast to discuss the concerning increase of lawsuits filed against trucking companies. Texans for Lawsuit reform worked to successfully protect truckers from an active plaintiffs’ bar in the Lone Star State. He breaks down the harm too many lawsuits have on the industry, consumers, and businesses of all sizes. Parsley shared lessons others can draw from reform efforts in Texas.
Trucking companies face more “nuclear verdicts” than most other companies. A nuclear verdict is a jury award of $10 million or more. Plaintiffs’ lawyers use tactics that tap into jurors’ fear and anger, and they urge them to “punish” companies by returning sky-high verdicts.
The unseen costs of a nuclear verdict extend far beyond the company. They contribute to high insurance premiums, making it more difficult for companies to find affordable insurance, if at all. Some insurance companies have stopped writing policies in states like Louisiana where plaintiffs’ lawyers have filed large numbers of lawsuits against trucking companies. Without affordable insurance, companies are forced to suspend operations, raise rates, or try to stay in business with less comprehensive insurance policies. That can, in turn, make it harder to find drivers or attract companies that rely on trucks to transport goods.
The growth in lawsuits can be attributed to the abusive litigation cycle of trial lawyer advertising and third-party litigation funding (TPLF). Plaintiffs’ lawyers advertise their services through billboards and television ads, promising big paydays. In reality, attorneys take large cuts of lawsuit payouts, and victims often receive much less than ads suggest. TPLF is the fuel that powers it all. It’s a secretive industry where hedge funds and other financiers invest in lawyers and lawsuits in exchange for their own shares of settlements or judgments. There are few safeguards on TPLF, which means outsiders can control litigation and encourage more lawsuits.
On the podcast, Parsley discusses how Texans for Lawsuit Reform successfully advocated for changes to Texas’s laws that will stop abuses in trucking lawsuits while allowing real victims to pursue their cases. He also discusses what’s being done now to keep Texas pro-business and pro-legal reform. Other states could look to Texas as they consider ways to keep roads safe while letting truckers do their jobs.
The supply chain crisis might not resolve any time soon, but policymakers will make it worse if they give plaintiffs’ lawyers free rein to file excessive lawsuits. It’s time to get trucking companies out of the courts and back on the road.
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