Lauren Zelt, executive director of Protecting American Consumers Together (PACT), said that lawsuit abuse contributes to economic inflation in Texas and that only meaningful reform can protect both consumers and plaintiffs.
"Texas consumers are unnecessarily strapped by the economic inflation due to lawsuit abuse, and the only way to undo this hidden tax is to pass meaningful lawsuit abuse reform at the state and federal level," said Zelt. "Reforming the system is the only way to ensure that plaintiffs can access a legal system that treats them with the dignity and respect they deserve while protecting consumers' pocketbooks."
According to PACT, a study by The Perryman Group found that excessive litigation costs the average Texas household $5,549 per year, ranking ninth highest in the United States. This total includes $2,951 in lost earnings and $2,597 in inflated costs for essentials like insurance, medication, and household goods. The report indicates that lawsuit abuse leads to higher consumer prices and reduced income across the board. Zelt called for state and federal reforms to eliminate this "hidden tax" and restore fairness to the legal system. A recent PACT poll found that 74% of voters support federal action to curb lawsuit abuse.
A study from the U.S. Chamber Institute for Legal Reform revealed that Texas ranks among the top five states for nuclear verdicts, with 130 personal injury and wrongful death cases resulting in $16 billion in awards from 2013 to 2022. The study highlighted how "anchoring" tactics—where attorneys suggest arbitrary, high-dollar damage amounts—played a major role in inflating jury awards. One example involved a $39 million verdict in an auto accident case after a plaintiff’s lawyer proposed a symbolic per-mile damage figure; the Texas Supreme Court later overturned it due to improper tactics. These excessive awards contribute to higher insurance premiums and consumer costs while undermining fairness in the legal system.
A new report from the American Tort Reform Association (ATRA) reveals that Texas is a major hub for legal services advertising, with Dallas and Houston both ranking in the top ten U.S. media markets for total spending on these ads in 2024. Dallas saw approximately $69.8 million spent on 622,212 ads, while Houston accounted for over $56.6 million in spending on more than 411,000 ads. These figures reflect a broader national surge in trial lawyer advertising, which reached $2.5 billion across the U.S. last year—more than double what pizza restaurants spent.
The American Property Casualty Insurance Association (APCIA) and Munich Re US released a survey indicating that most Americans believe certain plaintiff lawyer tactics contribute to rising insurance and consumer goods costs. The Harris Poll conducted among over 2,000 U.S. adults revealed that 69% think third-party litigation funding (TPLF) and jury anchoring increase insurance costs, while 66% say these practices raise prices of everyday items. Additionally, 77% agree that allowing foreign investors to participate in TPLF could pose a national security threat.
Lauren A. Zelt is a public affairs strategist with over 15 years of experience in media, politics, and communications. She previously led her own public relations firm and has served in senior communications roles on Capitol Hill and presidential campaigns.