Impact from Texas Tort Law on Damages Recovered

This paper looks at Texas tort law reform to make claims regarding the relationship between Texas tort reform and damages recovered. Starting with reform in 1977, Texas has passed 15 pieces of legislation that, in principle, restrict the damages plaintiffs recover. Most empirical analyses have focused primarily on analyzing behavior resulting from the tort reform. In other cases, research has looked at the impact the most recent reform has had on damages recovered in medical malpractice lawsuits. This paper is the first to study the impact of Texas tort law reform on damages recovered while looking at the entirety of recent law reform in the state. Specifically, I test the impact of the 15 different laws on total allocated loss, economic loss, and noneconomic loss recovered in all cases from 1988-2012. My findings suggest that caps on medical liability damages are successful at decreasing damages recovered when the cap is geared at either noneconomic damages, or a total damage figure that excludes punitive damages. This suggests that future caps on medical liability damages should explicitly cap either economic or noneconomic damages. Next, the results imply that caps on punitive damage legislature were most successful when using specific value caps paired with an evidence standard—caps of this nature decreased total damages by 28% in 1987 and 85% in 1995. Finally, an introductory legislation restricting the use of joint and several liability in cases when plaintiffs had little guilt was successful, it decreased total damages by 18.6%. This was followed by three failed attempts to impact the application of joint and several liability where the guilt threshold was higher, suggesting that joint and several liability is rarely used if the plaintiff has substantial guilt.