CHARLESTON – A statewide legal reform group says a recent economic impact study shows lawsuit abuse continues to cost West Virginians jobs and hurt the local economy.
A group for state trial attorneys dispute the results, saying the so-called “tort tax” isn’t real.
On February 25, West Virginia Citizens Against Lawsuit Abuse cited the recent Economic Impact Report by the Perryman Group that showed the “tort tax” reduces output by $676.97 per capita. That figure is up slightly from last year’s numbers.
Thomas (left) and Broadwater
| File photos
The study also says it costs the state 10,737 jobs.
WV CALA Executive Director Greg Thomas said “negative impacts of our aggressive tort system have a negative fiscal impact in West Virginia of $334 million.” He said lawsuit abuse hampers economic growth and erodes confidence in our legal system, noting that every American pays this annual “tort tax” due to the costs of lawsuit abuse. But he said small businesses often bear the brunt of excessive litigation, undermining their ability to succeed.
“Lawsuit Abuse hurts family budgets and job creators alike,” Thomas said. “West Virginia leaders have taken steps to improve our legal system in West Virginia, but we still have a lot to do.
“The tort tax of nearly $700 per year is a major blow to average working families in West Virginia.”
Thomas said the “tort tax” increases the costs and risks of doing business in the Mountain State and causes higher insurance premiums, increased healthcare costs, declining availability of services and deters economic development and job creation initiatives.
He said the manufacturing industry and healthcare are hit hardest by the “tort tax,” but he said it puts a heavy burden on all West Virginians.
“Let’s hope that the Legislature starts to focus on ways to improve the economy in West Virginia by enacting legal reforms during this current session,” Thomas said. “There are several good ideas being considered that would contribute to lowering the ‘tort tax’ in West Virginia even more.”
But the president of the West Virginia Association for Justice says the tort tax simply does not exist.
“It has been debunked for more than 10 years,” Steven Broadwater told The West Virginia Record. “The so-called ‘study’ on which it’s based doesn’t even examine actual court costs. It’s a joke.
“Here are some real facts for you. Citizens Against Lawsuit Abuse is a front group created by a PR firm. It doesn’t represent West Virginians. It represents billion-dollar, woke corporations and the insurance industry. They want you to give up your constitutional rights so they can increase their profits. What’s worse is that Big Insurance is crying ‘poverty’ and raising our premiums when its 2024 profits totaled $144 billion.”
“West Virginia has real problems for our Legislature to address including education, job training, better roads, and broadband. It doesn’t have time to waste on fake studies peddled by its lobbyist.”
According to a previous study conducted by the Perryman Group for CALA, West Virginians pay an annual tort tax of $662.35.