Small business owners from Texas have expressed concerns that excessive litigation is impacting their operations, leading to reduced hiring and scaled-back investments. This testimony was given during a legislative hearing on March 31.
"Excessive litigation poses significant challenges to our business operations and overall growth," said Witness. "In the last 10 years, our insurance costs have increased five times and our deductible is up 10 times. The financial burden drains our resources and diverts our funds away from essential investments in infrastructure, training, and emergency response. Litigation also disrupts our daily operations and takes valuable time away from our primary responsibilities."
Senate Bill 30, introduced in the Texas Legislature in 2025, seeks to address lawsuit abuse by capping non-economic damages in certain civil cases and limiting frivolous claims against small businesses. Supporters argue that the bill would lower litigation costs and enhance the business environment. However, opponents are concerned about restricting legal recourse for plaintiffs. The bill is part of a larger tort reform package being considered during the current legislative session.
According to a 2023 survey by the National Federation of Independent Business (NFIB), 60% of small business owners consider the cost and availability of liability insurance a major concern. Additionally, 31% reported premium increases in the previous year, while 14% had to reduce coverage to manage costs.
A report from the Texas Public Policy Foundation in 2024 estimated that excessive litigation in Texas results in over $14 billion in annual costs, with $6.5 billion directly affecting small businesses. The report also projected that reducing excessive litigation could create over 170,000 new jobs in the state.
Protecting American Consumers Together (PACT) is a coalition focused on combating lawsuit abuse and promoting legal reform for consumers and businesses' benefit. The group unites advocates from various sectors to support policies aimed at reducing frivolous litigation and ensuring fair legal processes. PACT's efforts include raising awareness and driving legislative change at the national level.