OKLAHOMA CITY (OBV) — A study from one of the nation’s top economic and financial analysis firms found that excessive tort costs are harmful to Oklahoma’s economy and detrimental to a business’ ability to grow.
The State Chamber Research Foundation (SCRF) commissioned The Perryman Group to conduct the study on excessive tort costs’ impact on the state’s economy and business community.
“This is costing us businesses and jobs,” said Chad Warmington, president and CEO of The State Chamber. “The tort changes are a factor in competitiveness. Companies, when looking to relocate, take into consideration a state’s legal climate. This is horrible for the state of Oklahoma.”
Excessive tort costs include the number of awards and the amount of the damages given against a defendant in civil litigation, which are exasperated by the lack of cap on non-economic damages, nuclear verdicts and third-party litigation funding.
It’s become an issue of growing concern among state and business leaders. Gov. Kevin Stitt recently spoke against the harm excess tort costs inflict on businesses and the state as a whole.
“Tort reform is something that businesses need assurance [on]. You can’t have runaway jury verdicts. That’s something that I think is really important,” Stitt said.
The Perryman Group’s analysis found that excess tort costs are costing Oklahoma $3.7 billion in gross product each year and almost 32,000 jobs. Also, excess tort costs resulted in Oklahoma losing $14.9 billion in gross product and 128,500 job years (one person working for one year) from 2020 to 2023.
The excess tort costs also decreased tax revenue. The Perryman Group found that the annual decrease in tax receipts includes $195 million to the state and $162.5 million to local government entities throughout Oklahoma. Cumulative losses from 2020 to 2023 came to an estimated $776.1 million to the state and $646.6 million to local governments.
The Perryman Group says excess tort costs will continue harming Oklahoma’s economy. The study anticipates excess tort costs causing major cumulative losses in economic development from 2024 through 2033, including $24.1 billion in gross product and almost 155,900 job years.
SCRF’s Amanda Hall said a cap is needed to prevent excess tort costs from hindering the state’s economy.
“We’ve got a good ten years’ worth of data to show that the removal of that cap has had a massive economic impact to the state,” Hall said. “The numbers show it – the lack of cap leads to devastating verdicts for businesses.”
The Perryman Group’s full study is shared below:
