Executive Briefings

Is Need for Tort Reform Exaggerated?

Texas's new "loser pays" bill, an extension of the state's much-vaunted 2003 tort reforms, would make some people who lose a lawsuit responsible for the legal fees of their opponents. Even some winners would be on the hook, if the jury award is much less than they had previously been offered in a settlement.

Tort reform has long been totemic to the political right, which argues that the current system allows trial lawyers to seek extortionate settlements for alleged damages. That creates extra costs for business, encourages litigiousness and warps sectors of the economy. According to some assessments, the costs of the tort system are equivalent to almost 2% of GDP each year.

Frivolous lawsuits are, along with criminal aliens and fraudulent voters, a bit of a bogeyman. They do exist, but are hardly as ubiquitous as the thundering rhetoric would suggest.

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Texas's new "loser pays" bill, an extension of the state's much-vaunted 2003 tort reforms, would make some people who lose a lawsuit responsible for the legal fees of their opponents. Even some winners would be on the hook, if the jury award is much less than they had previously been offered in a settlement.

Tort reform has long been totemic to the political right, which argues that the current system allows trial lawyers to seek extortionate settlements for alleged damages. That creates extra costs for business, encourages litigiousness and warps sectors of the economy. According to some assessments, the costs of the tort system are equivalent to almost 2% of GDP each year.

Frivolous lawsuits are, along with criminal aliens and fraudulent voters, a bit of a bogeyman. They do exist, but are hardly as ubiquitous as the thundering rhetoric would suggest.

Read Full Article