Gov. Perry: Lawsuit Reforms will Expedite Justice for Legitimate Claims and Help Strengthen Texas' Economic Climate

March 14, 2011
Office of the Governor

Gov. Rick Perry today reiterated his commitment to further strengthening Texas' legal system by creating a "loser pays" system to provide stronger protections against frivolous lawsuits, establishing an early dismissal option for frivolous lawsuits, ensuring new laws cannot create causes of action unless expressly established by the Legislature, and setting up speedier trials and limited discovery for lawsuits with claims between $10,000 and $100,000. The governor was joined by Rep. Brandon Creighton and Sen. Joan Huffman, who are sponsoring House Bill 274 and Senate Bill 13 to address this issue.

"The costs associated with frivolous lawsuits can grind almost any business to a halt, as owners are forced to deal with mounting legal fees and court costs even if they've done nothing wrong," Gov. Perry said. "Implementing loser pays lawsuit reforms will expedite legitimate legal claims, crack down on junk lawsuits and stimulate Texas jobs and economic opportunity relieving Texans of the burdens created by frivolous and drawn-out lawsuits."

Gov. Perry noted the success of medical lawsuit reforms implemented in 2003, which helped reduce lower the number of frivolous lawsuits against doctors in Texas. Before these reforms were passed, doctors were faced with costly and prohibitive insurance premiums, pushing many to leave the state or stop practicing medicine altogether. The reforms, which placed a cap on non-economic damages, helped lower insurance rates and attract more than 14,000 doctors to return to practice in Texas or begin practicing here for the first time.

"For far too long, Texans have been paying the price for drawn-out lawsuits that benefit no one except those collecting fees for unnecessary services," Rep. Brandon Creighton said. "This legislation represents a powerful step forward in cutting down on the abuse of our court system, freeing employers to focus their time and resources on building their businesses instead of endlessly defending themselves in court. Further, the bill I am working on results in the non-prevailing side paying the others' costs - a fair 'two-way' street."

"The reforms in SB 13 are designed to guard against frivolous civil litigation in Texas by curbing needless and abusive lawsuits," Sen. Joan Huffman said. "The improvements will make our system more accessible to all parties and further improve the legal climate in our state."

Further, Gov. Perry said the state must strengthen the principles that have helped Texas lead the national economic recovery and add more jobs than any other state in 2010, including keeping taxes low, and maintaining a predictable regulatory climate and fair legal system. The governor is committed to keeping taxes low in order to help small businesses continue to succeed and create jobs.

Texas' economy continues to receive national recognition. Site Selection Magazine awarded Texas the 2010 Governor's Cup for most new and expanded corporate facilities announced over the year. Newsweek recently ranked four Texas cities in its list of 10 cities best situated for economic recovery, and described Texas as the top destination for job-seeking Americans. The Wall Street Journal recently credited the state's low taxes and employer-friendly environment with helping make Texas the job creation capital of the nation. Additionally, Texas was recently designated the top exporting state in the nation for the ninth year in a row, and no other state is home to more Fortune 1000 companies.

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