CHARLESTON – A statewide legal reform group says a recent economic impact study shows the Charleston area as the center of the state’s lawsuit abuse problem.
The study was conducted by the Perryman Group for the American Tort Reform Association as an assessment of excessive tort costs in West Virginia. A spokesman for West Virginia Citizens Against Lawsuit Abuse says the results show that Charleston remains the capitol of lawsuit abuse in the state.
According to the study, excessive tort litigation contributes to the loss of 10,407 jobs in the state of West Virginia each year with a direct cost of $.0821 billion and negative impact of $1.108 billion on the state gross domestic product. It estimates annual lost revenues of $56 million for the state government and $48.1 million for local governments.
Thomas
Assessments also were done for the Charleston and Huntington areas.
The Charleston MSA showed a negative impact of $173.3 million on personal income and a loss of 2,530 jobs annually, while the Huntington MSA showed a negative impact of $90.6 million on personal income and a loss of $1,322 jobs each year. Between the loss of income and loss of tax revenues, the annual “tort tax” on Charleston residents is $1,060 per person and $752 per person in Huntington.
The “tort tax” is defined as the per capita loss of gross product in the area.
“Charleston has long been the capitol of lawsuit abuse in West Virginia,” WVCALA spokesman Greg Thomas said in a press release. “New leadership at the Capitol have made many great legal reforms over the last seven years and new members of the state Supreme Court have improved our state’s legal climate, but it appears that the courthouse in Kanawha County is now the safe haven for greedy personal injury lawyers.”
Thomas said changes at the Kanawha County Courthouse are “long overdue.”
“It is time for our local and state leaders to focus on reforms at the Circuit level of our state’s legal system,” Thomas said. “WV CALA plans to focus on helping improve the local legal climate and lower the ‘tort tax’ on Charleston residents.”
According to information about the study, the Perryman Group quantified the aggregate excess costs associated with the current system, allocated this amount across states and examined the resulting downstream effects.
The Charleston MSA includes Kanawha, Boone and Clay counties, while the Huntington MSA includes Cabell, Lincoln, Putnam and Wayne counties.
The Perryman Group says costs were allocated to MSAs based on relative legal costs in the area and economic and demographic patterns. It said tort reform can reduce or eliminate these costs, so the results may also be viewed as a measure of the benefits of reasonable reform measures.