Credit: OCPA website, October 2024.
10.3.24 – Oklahoma Council of Public Affairs
What happens in a courtroom impacts more than the entities directly involved in a case because the repercussions of court decisions reach across the state. And bad judicial opinions can ultimately reduce business growth and job creation, according to one national expert on judicial activism.
“A state’s judicial climate greatly impacts its economic growth and residents’ job prospects,” said Tiger Joyce, president of the American Tort Reform Association (ATRA).
The ATRA’s particular focus has been on how a legal system’s tolerance for frivolous lawsuits can ultimately drive jobs out of a state or locality or deter the creation of new jobs. Oklahoma is not immune from that reality, Joyce noted.
“Lawsuit abuse increases the costs of goods and services, including driving up insurance rates,” Joyce noted. “The annual impact of excessive tort litigation on Oklahoma businesses is approximately $7.3 billion each year. In Oklahoma, that amounts to an average annual ‘tort tax’ of approximately $934.73 per person. These costs further result in an estimated loss of 34,511 jobs each year in the state.”
The American Tort Reform Association has included Oklahoma in its “Judicial Hellholes” updates several times in recent years, citing decisions by the Oklahoma Supreme Court.
In 2020, Oklahoma was highlighted after the state supreme court struck down caps on awards for noneconomic damages. The American Tort Reform Association called the Oklahoma Supreme Court ruling “blatant overreach by the court,” noting that courts elsewhere have typically “respected the prerogative of legislatures to enact reasonable limits on awards for pain and suffering.”
The group’s report for 2019-2020 warned, “Throughout the first half of 2019, the Oklahoma Supreme Court significantly diminished the role of the legislature with regard to civil justice policy by handing down activist opinions that either strike down existing laws or interpret them with a complete disregard for their plain meaning.”
In 2019, a press release from the organization stated that the “problems that we have identified with Oklahoma’s legal environment are now so troubling that we are adding it to our ‘Judicial Hellholes’ list.”
Joyce said Oklahoma policymakers have made progress addressing the problems within the state’s court systems, but more is needed.
“Oklahoma has some existing laws on the books that lessen this burden, but leaders must be diligent in applying these laws and consider a variety of additional reforms,” Joyce said. “For example, the state should ensure that there is transparency anytime local government officials seek to retain private, outside counsel on a contingency fee basis.”
He also said policymakers “should rein in current law to combat excessive costs and delays in litigation involving routine property claims.”
“When plaintiffs’ lawyers are allowed to make outsized demands during the discovery process, they generate fees that benefit only themselves,” Joyce said. “Failure to address this issue will directly impact the cost and availability of insurance for Oklahoma consumers and businesses.”
And he said policymakers should address the issue of third-party litigation financing.
“Third-party litigation financing has also become a concern nationwide as various investors pour billions into funding litigation they deem favorable,” Joyce said. “Requiring disclosure around such arrangements and holding funders and plaintiffs liable for costs would additionally improve the state’s judicial climate while discouraging frivolous claims. Reform also must ensure that the parties and their counsel, not outside investors, make the key decisions in litigation. Oklahoma could establish itself as a national leader on this important issue.”