Tort reform aiding job creation efforts
It’s been more than a year since I signed the Tort Reform Act of 2004 into law. Ending lawsuit abuse was a top priority for my Administration because it was an enormous drain on job retention and creation in Mississippi.
You may remember that, for too many years, every small business in Mississippi was one lawsuit away from bankruptcy, and doctors and other health care professionals were one lawsuit away from leaving the state.
Mississippi had a bad reputation in national business circles as a place where employers were unfairly targeted with frivolous lawsuits. This reputation led to national publications calling Mississippi a “judicial hellhole,” which hurt our job creation efforts. Even companies such as Toyota said Mississippi’s legal climate was one of the reasons the automobile manufacturer decided not to locate one of its plants in our state.
Knowing we had to change this reputation in order to achieve maximum success in job creation, I partnered with an aggressive coalition of lawmakers, local community leaders, small business owners, the medical community, manufacturers, the financial services sector and others in building a powerful case for civil justice reform. After some initial hesitation at the behest of the trial lawyers lobby, the majority of lawmakers embraced a comprehensive tort reform bill, which overwhelmingly passed both houses.
Suddenly, the dark clouds over Mississippi’s future parted and the forecast brightened for business wishing to locate or expand operations in Mississippi. Our state won high praise from such national organizations as the Heritage Foundation, which called our new law “the most comprehensive tort reform law in the nation.” Fraudulent cases are beginning to be kicked out of court and prosecutors are finally pursuing defendants who collected money based on fraudulent claims.
As your governor, I was invited to detail the new law in a speech to the U.S. Chamber of Commerce, which had given Mississippi a 50th ranking for its unfair legal climate several years in a row. The Chamber and associated pro-business groups now acknowledge that our new law is changing not only the poor rankings and reputation, but also the very climate for job growth and business expansion. I was proud to accept the Chamber’s State Legislative Award on behalf of those who worked so hard on the passage of meaningful tort reform.
Since the tort reform law was passed, Mississippi has seen positive results.
• Insurance rates have decreased – Homeowner’s insurance rates, automobile insurance rates, and property insurance rates are down for many in our state. For instance, St. Paul’s decreased its rates for one of its general liability programs by an average of 60 percent in Mississippi. GE Capital Insurance Group has decreased its commercial property rates by an average of 20 percent.
• New insurance companies entering market – At least two companies have announced that they will enter the Mississippi market this year.
• New insurance programs – More than 50 new insurance programs have been approved by the Insurance Department in 2005. This means more competition, more affordable insurance, and more jobs for Mississippians.
• Health insurance – The main insurer of our doctors has started writing new policies and didn’t raise premiums for the first time in years. Blue Cross Blue Shield cut some of its health insurance rates.
To be sure, tort reform is helping ease a health care crisis in our state and restoring balance to the entire system. A fair legal climate is just one of the vital fundamentals for job creation, especially now as Mississippi catches the rising tide of a growing national economy.
Now that we are climbing out of a budget hole without raising taxes and improving workforce development and training skills, we are poised for more economic growth – and the promise of more higher-paying, higher-skilled new jobs. The early returns are good, and I expect them to get better.
Governor Haley Barbour
P.O. Box 139 Jackson, MS 39205
Phone: 601.359.3150 Fax: 601.359.3741