Texas Top Tort Environment

Tort reforms and monetary caps have put Texas at the top of the list of states with the best tort cost environment, while Vermont picks up the rear, according to a new study.

The U.S. Tort Liability Index: 2006 Report, published by the Pacific Research Institute, ranks all 50 states in terms of relative tort burdens and relative tort reforms.

“By placing monetary caps on damages and instituting a wide range of tort reforms, state officials have made Texas very attractive for businesses–it's no surprise that the state has had a strong economy,” said study author Lawrence McQuillan.

In addition to Texas, the top five states were Colorado, North Dakota, Ohio and Michigan.

At the bottom were Vermont, Rhode Island, New York, Pennsylvania and Maryland.

The higher-ranking states tended to be in the Rocky Mountains and Great Plains, with some top performers–New Hampshire, Ohio, Texas and Virginia–distributed across the country.

The poorest-ranking states tended to be clustered in the Northeast and on the southern border. The Deep South and parts of the Southeast also ranked poorly.

Neil Alldredge, senior director of state advocacy for NAMIC, noted: “It's not surprising that Texas leads the nation in this category. The legislature has adopted substantial reform over the last few years, and in many cases those have become models for other states to follow.”

The states that are well positioned to remain at the top in future rankings are those with relatively low monetary tort losses that have also enacted some significant reforms that will lower future losses as well. These states include Kansas, Michigan, Texas, Utah and Virginia.

States that are poised to fall in future rankings, or remain at the bottom, are states with relatively high monetary tort losses. They also have significant threats that have enacted few if any comprehensive reforms. These states include Alabama, Florida, Illinois, Pennsylvania and Vermont.