AUSTIN – Since 2003, there’s been at least one issue nearly all Texas Republicans could unite behind – tort reform.
And now with trial lawyers filing hundreds to thousands of lawsuits against insurers, agents and adjusters after every major weather event in the Lone Star State, legislators are pushing to end what one Republican Party leader is calling “the worst lawsuit abuse in Texas today.”
“Twenty to 30 years ago, Texas was known as a haven for plaintiff lawyers and jackpot justice,” said Tom Mechler, chairman of the Republican Party of Texas. “We had a national reputation for lawsuit abuse, and it created a drag on our economy and job creators.”
Mechler says trial lawyers have a “knack” for abusing the judicial system, which led the state to start enacting tort reform legislation in 2003 in hopes of curbing medical malpractice lawsuits.
“Texas physicians were being sued at unprecedented levels – causing their insurance premiums to skyrocket and ultimately led to mass departures of Texas physicians from our state,” Mechler said. “In some cases, their premiums were increasing by triple digits.”
Mechler says Texas’ medical liability reforms protected healthcare professionals and businesses “from out-of-control trial lawyers” who could bankrupt defendants with a single lawsuit, allowing them to remain in Texas and even expand.
A little more than a decade after the medical liability reforms were signed into law, the Texas Medical Board licensed a record number of new physicians in 2015, surging past the 4,000 mark for the first time in history.
And since 2003, whether it be “Loser Pays” or asbestos litigation, Texas legislators have seemingly worked on new tort reform efforts every session, with mass hailstorm lawsuit abuse taking central focus in 2017.
“Currently, hail litigation is the worst lawsuit abuse in Texas today,” Mechler said. “Texas homeowners already pay some of the highest property insurance premiums in the country because of our severe weather. Like any other business, insurance companies pass their costs through to their customers.
“This lawsuit abuse will lead to increased deductibles and premiums, or reduced or lost coverage for property owners.”
Statistics show hail litigation can drag on for years, significantly delaying the funds policyholders need to fix their home after a major storm.
On average, it takes 94 days to close an insurance claim. However, when a lawsuit is filed, it takes an average of 697 days to close a claim, according to the Texas Department of Insurance.
Both Gov. Greg Abbott and Lt. Gov. Dan Patrick have openly called for an end to abusive hailstorm litigation. Legislators responded, introducing Senate Bill 10 and House Bill 1774 – two pieces of legislation aimed at ending the perceived crisis.
“Delivering real reforms and protecting hard working Texans is something all Republicans can agree on,” Mechler said. “The Texas Legislature must put an end to this abuse while continuing to protect the right of every Texas consumer to sue if their insurance company doesn’t pay a claim fully.”
Before two hailstorms ravaged Hidalgo County in 2012, around 1 to 2 percent of insurance claims morphed into lawsuits.
According to TDI, that rate jumped to well above 20 percent in Hidalgo County’s case. And since then, other Texas counties hit by major hailstorms have shown similar trends.
“The fact that the lawsuit-to-claim ratio increased 15 times statewide after storm-chasing lawyers created this litigation explosion proves that they are once again purposely abusing the system to their advantage,” Mechler said.
Paul Simpson, chair of the Harris County Republican Party, echoes the sentiment, telling the Record that the “current storm damage lawsuit epidemic needs to be cured.”
“The pending bill to reform hail storm litigation preserves incentives for insurance companies to promptly settle consumers' legitimate claims,” Simpson said. “What it will cure is the recent epidemic of storm lawsuit abuse by lawyers who enrich themselves at the expense of consumers, with excessive demands that drag out the claims process, push insurance costs higher, and drive insurers out of the market.”
Trial lawyers advertise heavily after hailstorms in search of clients, going so far as to set up booths at flea markets and grocery stores. Reports of hail attorneys employing contractors and adjusters to funnel hail victims to their law offices have also surfaced in recent years.
Mechler says these “out-of-control trial lawyers” tend to be some of the largest Democrat fundraisers in the state and “purposely abuse the system to help fund the Texas Democratic Party.”
Houston attorney Steve Mostyn, one of the largest funders of Democrats within the state, made hundreds of millions suing insurers in the aftermath of Hurricane Ike, creating a model he and other trial lawyers now employ after every hailstorm.
Simpson says the difference between Republicans and Democrats is that Republicans understand the need for laws that protect consumers while not incentivizing those who would abuse the system.
“By contrast, Democrats and affiliated liberal groups, funded by their trial lawyer allies, want to turn Texas Blue by enriching themselves to fund their left-wing schemes that would wreck Texas,” Simpson said. “Republicans want Texas to remain the national leader it is today, so they know how important it is to stop these groups from turning Texas into another lawsuit-crazy California.
“Maintaining balance in our laws is essential to keeping Texas strong.”