A bill that proponents say will help control abusive lawsuits against commercial motor vehicle operators following accidents has passed the Texas Senate.
House Bill 19 would have a big impact on the commercial auto insurance market, as it aims to limit lawsuits following commercial vehicle crashes its supporters say. The insurance industry-supported measure by Rep. Jeff Leach would, among other things, require a two-part trial in civil actions involving a commercial motor vehicle if requested in a motion by the defendant.
In the bifurcated trial system, the driver of the vehicle subject to the civil action must be found “negligent in operating an employer defendant’s commercial motor vehicle” before the lawsuit can proceed to the second phase, which involves a claim against the driver’s employer, according to a House summary of the bill.
A Senate analysis explaining the reasoning behind the bill states that around “88 percent of all commercial trucking companies in Texas are considered small mom and pop businesses. These companies, although heavily regulated by the state and federal government, are experiencing a sharp increase in the number of collision lawsuits filed against them. As a result, commercial vehicle insurance rates are skyrocketing, increasing from 10 percent to 30 percent in 2018 and 2019, respectively.”
Leach said in his summary that the number of lawsuits arising out of commercial motor vehicle crashes in Texas has increased by 118% over the past 11 years.
HB19 first passed the House of Representatives on April 30 with the addition of two amendments, “which included a technical amendment and an amendment requiring TDI to study the impact of the legislation on the insurance industry,” according to the Insurance Council of Texas.
Texans for Lawsuit Reform and the Keep Texas Trucking Coalition supports HB19, as does the Independent Insurance Agents of Texas, the Insurance Council of Texas, and the American Property Casualty Insurance Association (APCIA), which says it is concerned about the increase in attorney involvement in automobile accidents in Texas.
The bill’s opponents say it’s a giveaway to trucking companies and insurers. Texas Watch, which describes itself as a consumer advocacy organization, said on its website that the bill gives “trucking corporations less incentive to follow safety measures” and makes “it harder to punish trucking companies through our courts when they violate safety standards.”
Following Senate passage of the bill, American Trucking Associations President and CEO Chris Spear said in a statement: “Despite the plaintiff bar’s best efforts to lie about and distort the contents of this bill, the Texas Senate took a resoundingly bipartisan vote today to curb lawsuit abuse and restore balance and fairness to the civil justice system.”
Texas Trucking Association President and CEO John Esparza added: “With the unanimous passage of House Bill 19, the trial process will continue to ensure accident victims are compensated when wrongfully injured, while also protecting businesses across the state from biased and unfair courtroom tactics.”
The Texas House must concur with the Senate version before the bill is sent to Gov. Greg Abbott for his signature. If signed by the governor or allowed to become law, the measure would become effective on Sept. 1, 2021.
*This story ran previously in our sister publication Insurance Journal.