Texas – Asbestos-related litigation has so far been worth billions of dollars in America. A new report released by economist M. Ray Perryman indicates that legal reforms in Texas that limited civil litigation has resulted in a boost for the state’s economy.

In the report entitled “A Texas Turnaround: The Impact of Lawsuit Reform on Business Activity in the Lone Star Sate,” Perryman says that the boost to the economy, is to the tune of $7.88 billion in annual spending, and almost 40,000 permanent jobs, in the city of San Antonio alone.

The study carried out by Perryman examined the impact of legislative measures that limit the damages that can be awarded in liability cases against Texas businesses. The liability limits include damages awarded in asbestos-related lawsuits as well as other civil damages suits.

The report notes some interesting facts about the relationship between civil litigation and the local economy.

For example, Perryman’s report says that between 1999 and 2003, medical insurance premiums doubled for many doctors in Texas—because of excessive litigation and excessively large jury awards. The result, said Perryman, was that many medical insurance carriers had begun to exit the market.

In addition, the report noted, medical specialists—including neurosurgeons, orthopedic surgeons, and obstetricians—had begun leaving the state, perhaps because of the increased costs of insurance. As a result, the shortage of qualified health professionals throughout the state had become severe.

However, after 2003 the picture changed. In that year, Texas lawmakers adopted a constitutional amendment that capped ‘non-economic’ damages in medical cases to $750,000. The legislature also moved to reduce what Perryman called “abusive” asbestos and silica-related lawsuits.

As a result, Perryman says, the entire state, and San Antonio in particular, has benefited from a substantial economic boost.

The report says that medical insurance rates became more competitive as a direct result of the reforms, and that doctors and hospitals used their liability insurance savings to expand and improve healthcare services.

Perryman’s report says that the lawsuit reform had the net result of creating hundreds of thousands of new jobs in Texas, and that around 8.5% of the state’s economic growth over the past decade is a direct result of the lawsuit reforms.

Texas’ gain may mean losses for other states, however.

This might just mean that increasing numbers of people will take their cases to other states. Currently the law allows a lawsuit to be filed in any state as long as it can be proven that either the defendant or the plaintiff has a connection to that state.

This law already means that asbestos-related lawsuits are more likely to be filed in places such as Madison County, Illinois, which has a reputation for being sympathetic towards plaintiffs filing lawsuits against large corporations.

This entry was posted on Thursday, May 8th, 2008 at 3:02 pm and is filed under Asbestos Legislation, Texas. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.