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Lawsuit Reforms are Good for Texas Business Climate
Date:  7/11/2012
ArticleType:  Press Release

FOR IMMEDIATE RELEASE

Contact:  Bill Hammond

July 11, 2012

Phone: (512) 637-7701

                                                                                                                                                 

 

EMPLOYERS: LAWSUIT REFORMS

GOOD FOR TEXAS BUSINESS CLIMATE, JOBS

EMPLOYERS, MOST OF THEM SMALL, SAY REFORMS ALLOW FOCUS ON BUILDING THEIR BUSINESS, INSTEAD OF LAWSUITS

BUSINESS LEADER SAYS ALLOWING EMPLOYERS TO FOCUS ON GROWING BUSINESS, EXPANDING SERVICES IS GOOD FOR JOBS AND FAMILIES

AUSTIN, TX— Texas employers, many of them small businesses, say that the state’s lawsuit reforms are good for the economy, allowing them to focus on building their business, according to a new, statewide survey of Texas Association of Business (TAB) members.

“Texas is a place where employers can focus on building a business and creating jobs instead of operating in fear of a lawsuit that could force them to shut their doors,” said Bill Hammond, President and CEO of the Texas Association of Business. “Texas repeatedly outranks other states as the best place to do business and for job creation and, clearly, the lawsuit reforms that Texas legislators have passed in recent years are a major factor in our success.”

The statewide online survey of TAB members was conducted in late June 2012.  Respondents included 282 individuals who represent a business and 27 individuals who represent a chamber of commerce.  Most of the employer respondents were small business people who employ fewer than 50 employees.

Key findings follow:

  • When asked about the business climate in Texas, 81.9 percent of respondents say that Texas' business climate is either very good or good, while 16.1 percent rate Texas' business climate as fair, and only 2.1 percent say that Texas' business climate is either poor or very poor.
  • When asked about the importance of lawsuit reform for the business climate in Texas, 95.6 percent of respondents say that lawsuit reform is very or somewhat important to the Texas business climate, while only 2.1 percent say that lawsuit reform is either not very important or not important at all to the business climate in Texas, and less than 1 percent say that lawsuit reform has negatively impacted the business environment in Texas.
  • When asked about the impact of lawsuit reform on the business climate in Texas, 88.6 percent of respondents agree that lawsuit reform has had a positive or somewhat positive impact on Texas’ business climate, while 7 percent say that lawsuit reform has had no impact on Texas’ business climate and 4.5 percent say that it has had a negative or somewhat negative impact.
  • When asked to think about the impact of lawsuit reform on a wide range of businesses operating throughout the state, respondents say that lawsuit reform generally impacts the following for businesses (respondents could select more than one):
    • 71 percent say lawsuit reform means that that business can focus more on products/services and business instead of liability concerns;
    • 64.5 percent say it makes it less expensive to operate a business;
    • 48.1 percent say it creates a civil justice system that is predictable; and
    • 46.6 percent say it means more can be invested in growing a business.
  • When asked about the likelihood of their business being sued today, as opposed to five years ago, 42.2 percent of respondents, said their business has about the same likelihood of being sued today as it did five years ago, while 41.9 percent report that they believe they are less likely to be sued today than they were five years ago.

“Texas once had the biggest lawsuit abuse problem in the nation,” said Andy Tewell, Chairman of Citizens Against Lawsuit Abuse of Central Texas (CALACTX).  “Personal injury lawyers came here and bragged that they could win big money in Texas courts. Texans finally said, ‘Enough!’ and we fought for reforms that have restored justice in our courts.  As an employer, I know that these reforms work and help create the jobs that Texas workers and their families depend upon.”

 

Tewell added that employers don’t necessarily believe they are less likely to be sued today compared with five years ago, which is borne out in the survey data.

 

“The difference today is employers perceive the courts are more fair,” Tewell said.  “This is crucial to our state’s ability to create and retain good jobs.”

 

The positive impact of lawsuit reform is well documented. A recent study by The Perryman Group found that legal reforms have strengthened Texas’ economy and created jobs, with approximately 8.5 percent of Texas' economic growth since 1995 resulting from lawsuit reforms.  That accounted for nearly 500,000 new jobs, the study found.  And, while many states are suffering with weak economies and huge deficits in the wake of the national recession, Texas is currently one of the top job producers in the nation.

 

Data from the U.S. Bureau of Labor Statistics from shows that Texas has added 732,000 private sector jobs over the past 10 years -- seven times more than any other state. And for the eighth year in a row, Texas in 2012 was ranked by CEO Magazine as the best state in the nation for business.

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Founded in 1922, the Texas Association of Business is a broad-based, bipartisan organization representing more than 3,000 small and large Texas employers and 200 local chambers of commerce.

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