AUSTIN – The state of Texas was recognized as one of the most business-friendly in the country and tort reformers said capping how much a person can collect on a lawsuit is part of the reason.

“Unnecessary and abusive lawsuits create a hidden tort tax on goods and services, eating up time and money for job creators and families, hindering economic growth,” Lucy Nashed, communications director for the activist watchdog group Texans for Lawsuit Reform, told The Record.

Texas was recognized as the top state for business climate by Business Facilities Magazine, a national publication that looks into economic development, new business locations, business startups and similar topics.

Colorado was judged by the magazine best in business “growth potential” in the country.

Gov. Greg Abbott said in a press release that Texas is one of the easiest states to do business in because it has restrained government, lowered taxes, enacted smarter regulations, right-to-work laws and litigation reform. He added that such “pro-growth” policies allow businesses to flourish and attract new businesses from out of state fleeing over-taxation and regulation.

Business Facilities Magazine editor Jack Rogers also touted in the governor's press release that the state’s mining of ancient shale oil deposits located far underground, its burgeoning semiconductor fabrication industry and development of commercial space-launch enterprises for contributing to a growing economy.

Capping the state’s damages helped it achieve a better business climate Nashed said, and called tort reform a matter of common sense.

“It ensures our legal system is fair, honest and balanced,” she said.

Punitive damages in lawsuits are capped in Texas. These include for medical costs, lost wages and earning power, and damage to property. 

Punitive damages are capped at two times the amount of economic damage plus an amount equal to non-economic damages of up to $750,000. Thus in a car accident involving gross negligence, you could receive $4.75 million, or two times $2 million plus $750,000.

Nashed added that Texas’ preeminent role as the country’s healthiest business state was achieved by the efforts of reformers over the past two decades.

“It’s critical to ensuring the Lone Star State’s success in the future,” she said.            

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