Trucking Industry Applauds as Litigation Reform Law Takes Effect

A new law designed to protect the Texas commercial vehicle industry from excessive lawsuits took effect Sept. 1, 2021. Lauded by the state’s trucking industry, the new legislation modifies existing state law to reform trial procedures for personal injury lawsuits involving commercial vehicle crashes and may put downward pressure on insurance premiums for trucking and transportation companies operating in the state.

What the Law Does

The law provides a new framework for trial procedures, the use of evidence, and the determination of liability in certain civil actions involving commercial motor vehicles, which range from delivery vans and Uber and Lyft vehicles up to 18-wheelers. 

Lawsuits against a commercial motor vehicle owner or operator can be split into two phases at the timely request of the defendant. The first phase is to determine liability and the amount of compensatory damages. During this phase, juries will be presented only with evidence relevant to causation and injuries, rather than extraneous allegations unrelated to the accident in question. 

If the driver is found liable, the case would then be brought against the employer in the second phase, when potential exemplary damages would be assessed. The identity of the company employing the driver would not be revealed until the second phase, shielding large corporations from potential prejudice by juries who may be more likely to find against a company with deep pockets than a single owner-operator. 

Background

The number of motor vehicle lawsuits in Texas has increased by 118 percent over the last 11 years, according to State Rep. Jeff Leach (R-Plano), who introduced the legislation in the Texas House of Representatives.  

“In many instances, the person being sued is not at fault, yet must spend increasing amounts of money in court and to purchase insurance coverage,” Leach wrote in the bill analysis. “Excessive commercial motor vehicle litigation has been a concern of businesses of all sizes, employees, and drivers across Texas.” 

Signed by Gov. Greg Abbott in June, the new law was applauded by trucking industry groups, including the Texas Trucking Association (TXTA) and Southwest Movers Association (SMA).

“Today is a monumental day for the Texas trucking industry,” TXTA President and CEO and SMA Executive Director John D. Esparza said in a written statement about the new law. “For too many years, the trucking industry has been a lucrative profit center for some trial attorneys – oftentimes preying upon victims of accidents and guiding them to frivolous lawsuits, while also manipulating and misleading jurors on the facts of the case.” 

The law was opposed by many organizations, including consumer watchdogs like Texas Watch, which said it would give trucking companies less incentive to follow safety measures and make it harder to use the courts to punish violators of safety standards in a state that leads all others in trucking crashes and fatalities. In 2020, there were 32,562 crashes involving commercial vehicles in Texas, which led to 581 fatalities, according to the Texas Department of Transportation.  

Looking Ahead

How much the new law will impact trucking and transportation companies’ bottom lines remains to be seen. It’s likely that Texas will see a decrease in verdicts in lawsuits involving commercial vehicles, which should theoretically lead to lower commercial vehicle insurance premiums. The Texas Department of Insurance was ordered to conduct a six-year study on the impact of the bill on insurance rates and availability and to report its findings regularly to the State Legislature. 

Representing trucking and transportation companies has been a significant part of Pappas Grubbs Price’s practice for more than 20 years. If you would like to speak to a trucking lawyer about your transportation-related litigation matter, give us a call.