U.S. Chamber: Legal Reform Essential to Reduce Costs for Texas Families

Report Finds Lawsuits Cost Texas Families Nearly $5,000 Per Year;

Lone Star Economic Alliance Calls on Legislature to Restore Common Sense, Transparency and Fairness to Courts

AUSTIN, Texas, Feb. 18, 2025 /PRNewswire/ -- A new report by the U.S. Chamber of Commerce (U.S. Chamber) found that Texans are paying almost $38 billion a year, or an extra $4,594 per Texas household, to compensate for astronomical court costs in the form of skyrocketing insurance premiums and higher prices of most goods and services in the state. The report also noted that these costs grew at a rate of 9.7% a year from 2016-2022.

"The Hidden Costs of Lawsuits Continue to Grow" found that tort costs are an inherent part of the legal system – but their impact on Texas households is increasingly burdensome.

According to the U.S. Chamber study, "the high tort costs in Texas can be attributed to several factors that influence the state's legal environment, which is known for significant nuclear verdicts – large jury awards exceeding $10 million. These large awards not only increase the cost of individual cases but also contribute to higher insurance premiums and legal fees, which are ultimately passed on to consumers and businesses."

The Lone Star Economic Alliance (LSEA), a coalition of nearly 950 Texas job creators, citizens, and business associations from across Texas, is working to put a stop to the abusive lawsuits that make it hard to do business in Texas, calling on the Texas Legislature to restore common sense and fairness to the state's court system. 

"Lawsuits in Texas have spiraled out of control, impacting everyone. Small businesses are burdened with soaring insurance premiums that jeopardize their survival, while the constant wave of lawsuits drives up the costs of essential items like food and medical care," said Imad Sarkis, Vice President of Exxpress Mart convenience stores in Beaumont, an LSEA member.

The current legal climate in Texas has dramatically increased the cost and decreased the availability of insurance for all Texans and is forcing businesses to raise prices, lay off employees, or close their doors. 

"Insurance rates have reached unprecedented levels. The auto industry has consistently increased rates by 10-30% annually," said Dustin Glover, president of Threlkeld & Company Insurance in Tyler, an LSEA member. "Unfortunately, I've seen these rising costs force businesses in Texas to shut down. The highly litigious environment in Texas has left insurance carriers so wary of going to trial that they often settle even minor accidents for six- or seven-figure amounts, regardless of fault. Texas ranks as the third-worst state for insurance litigation, behind only Mississippi and Louisiana. This environment has driven many commercial auto and umbrella insurance carriers to exit the Texas market entirely, drastically reducing the number of companies willing to provide quotes."

"Families across Texas are paying thousands of dollars more than they should for goods and services every year – more than almost any other state – because lawyers have figured out how to game our court systems and put intense pressure on insurance companies to settle any case, regardless of the facts," said Fred W. Heldenfels IV, President and CEO of Heldenfels Enterprises, an LSEA member. "Perhaps most alarming is that these costs are growing at an unsustainable rate of almost 10% annually. The state must restore fairness and transparency to our court system before Texans are completely priced out of their homes and businesses."

"Drive down any Texas highway and you can see billboard after billboard by law firms bragging about the millions or even billions of dollars they have obtained through the Texas courts," saidAlex Hinojosa, Jr, president/CEO of Hino Gas Sales, Inc, an LSEA member. "People need to know that every one of those dollars comes out of their pockets, and all of us are paying more for everything due to rampant abuse of our court system. Every single good that end users use or consume in the U.S. – food, medicine, clothes, furniture, building supplies, equipment – is transported by commercial trucks. As commercial fleet owners, we are paying five to six times more for Commercial Auto Liability Insurance than we were five years ago, and we are all forced to pass on these excessive costs to the consumer."

"Lawsuit abuse in Texas has placed an undue burden on my businesses, particularly through inflated claims related to vehicle damages and medical expenses," said Sarah Hammond, CEO of Atlas Services in the Rio Grande Valley, an LSEA member. "These exaggerated costs, often manipulated by attorneys and providers, drive up insurance premiums and create financial strain. Instead of focusing on growth, innovation, or creating jobs, we are forced to divert resources to manage these challenges. This unfair litigation environment jeopardizes not only individual businesses but also the broader economic stability of our state. Addressing this issue is crucial to restoring fairness and protecting Texas businesses from predatory legal practices."

About the Lone Star Economic Alliance

The Lone Star Economic Alliance (LSEA) advocates for policies that ensure employers can continue to create jobs and safely provide the goods and services that are essential to Texas families. Formed by Texas job creators of all sizes, across all sectors, LSEA aims to curtail the skyrocketing cost of doing business by exposing unfair litigation practices and their impact on the jobs and businesses that fuel our economy. Visit lseatx.com.

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SOURCE Lone Star Economic Alliance