April 18, 2021

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Battle Brews over Texas Bills Aimed at Commercial Vehicle Accident Lawsuits

4 min read

A battle is brewing between trucking and insurance industry interests and trial lawyers in Texas over a pair of companion bills introduced in the Texas House and Senate that proponents say are aimed at providing consistency and uniformity in civil actions involving commercial vehicle accidents. Opponents, on the other hand, say the bills are simply an attempt to shield trucking companies and their insurers from liability in lawsuits brought by crash victims.

HB 19 by Rep. Jeff Leach and SB 17 by Sen. Larry Taylor are identical pieces of legislation that if passed would require a two-part trial in civil actions involving a commercial motor vehicle if requested in a motion by the defendant.

“The first phase of the bifurcated trial would determine liability for and the amount of compensatory damage. The second phase would determine liability for and the amount of exemplary damages to be awarded,” according to a House summary of HB 19.

HB 19 also provides, among other things, that a “defendant’s failure to comply with a regulation or standard would not be admissible into evidence and would not support a judgment for liability or damages unless the regulation or standard governs a specific aspect of the defendant’s or defendant’s employee’s conduct or omission that is at issue in the action, or a specific aspect of use or condition of the defendant’s property or equipment that is at issue, and a reasonable jury could find that the failure to comply was a proximate cause of the injury or death for which damages are sought,” the House summary states.

Texans for Lawsuit Reform and the Keep Texas Trucking Coalition support the bills, as does the American Property Casualty Insurance Association (APCIA), which says it is concerned about the increase in attorney involvement in automobile accidents in Texas.

Opponents of the bill say it’s a giveaway to trucking companies and insurers. According to a message posted on the website of Texas Watch, which describes itself as a consumer advocacy organization, the bills give “trucking corporations less incentive to follow safety measures” and “make it harder to punish trucking companies through our courts when they violate safety standards.”

The House summary also states that a provision of the bill “would require a court, on motion of a defendant, to dismiss a direct action against a defendant if the defendant stipulates that the injury or death for which damages are sought were caused by an employee acting within the scope of employment.”

A press statement released by the Texas-based Thomas J. Henry Law Firm, said that means the bills would force victims “to take legal action against truck drivers first, before they can hold trucking companies responsible for their failure to safeguard the public from big rig accidents. Even worse, the legislation would prevent an accident victim’s attorney from presenting discovery evidence into a trial that would incriminate the driver’s employer, the trucking companies who hire and oversee them.”

In 2019, the latest year for which crash data is available from the Texas Department of Transportation (TxDOT), there were more than 39,000 commercial motor vehicle accidents across the state.

For the year ending 2019, in the total commercial auto insurance market there were 106 insurer groups and 326 companies writing business in Texas. Direct premiums written totaled $4.2 billion and direct losses paid totaled $2.8 billion, according to data from the Texas Department of Insurance.

APCIA has released a report analyzing the influence of attorney involvement in commercial auto claims cases. “Trends in Attorney Representation: Texas Commercial Automobile Insurance” was published by the Milliman actuarial firm for the APCIA. The study looked at thousands of commercial vehicle accident claims over a five-year period, concluding “that larger losses in Texas grew at a faster pace than other losses. During the same period, attorney representation increased, even on smaller claims, and the relative costs of resolving claims were significantly higher for claims with attorney representation,” according to APCIA.

The APCIA highlighted the following key findings from the report:

  • “The number of commercial auto liability claims over $500,000 in value grew by 60 percent in Texas from 2015 to 2019.
  • Attorney involvement in commercial auto liability claims continues to rise in Texas, increasing over 14 percent compared to 2015. Attorney involvement also continues to increase in commercial auto liability claims, reaching nearly 40 percent of all claims.
  • When an attorney is involved in a commercial auto claim in Texas, both the average time to report claims (17 v. 31 days) and resolve them (165 v. 516 days) are considerably longer than when no attorney is involved.
  • The average commercial auto claim payout, for commercial auto claims with attorney involvement, are increasing faster than the costs for claims without an attorney.
  • In 2019, the average total loss with attorney involvement was 17.1 times higher, while the average cost for adjudicating a claim was 52.8 times higher.”

According to APCIA state government relations vice president, Lee Ann Alexander: “Lawsuit abuse is a top concern for insurers. APCIA is working with policymakers, industry leaders, consumers, and the business community to enact meaningful reforms that address lawsuit abuse and restore balance to the civil justice system. Our primary focus is a balanced civil justice system – one that is fair to all participants, promptly resolves legitimate claims, and increases certainty and predictability for all participants.”

Texas Top 10 Commercial Auto Insurer Groups — 2019
Insurer Group Market Share
1. Progressive Group 17.31%
2. Travelers Group 5.85%
3. Berkshire Hathaway Group 4.41%
4. Liberty Mutual Group 4.06%
5. Old Republic Group 3.77%
6. State Farm Group 3.77%
7. Zurich Insurance Group 3.32%
8. Hallmark Financial Service Group 2.98%
9. Nationwide Corp. Group 2.78%
10. Ace Limited Group 2.72%

Market Share Source: TDI

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