Oklahoma Legal Reform Advances with Key Bills Progressing

Stephanie Walton
Senior Director, Digital and Editorial Communications

David Meyerson
Senior Director, Legislative and International Affairs, Institute for Legal Reform

Published

March 28, 2025

At the heart of Oklahoma's economic success lies an undeniable fact: businesses fuel communities. From creating jobs to providing essential goods and services, businesses are woven into the fabric of everyday life. But what happens when excessive legal costs and frivolous lawsuits hinder business growth? More and more businesses in the Sooner State are facing this question every day, and leaders across the state are prioritizing tort reform to ensure a more predictable legal environment that helps foster growth, stability, and opportunity.

This year, Oklahoma's tort reforms go far beyond legislative action; they represent a commitment to the people, businesses, and future of the state.

Why Tort Reform Matters for Oklahoma

For Oklahoma businesses to flourish, they need clarity and fairness in the legal process. Excessive litigation costs and inflated lawsuit judgments drain resources that could be used to hire employees, expand operations, or offer better wages.

According to the Perryman's Group "The Economic and Fiscal Impact of Excessive Tort Costs on Oklahoma", heightened liability is costing Oklahoma $3.7 billion in gross product each year and almost 32,000 jobs. 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. This equates to a decrease in tax receipts of $195 million to the state and $162.5 million to local government entities throughout Oklahoma, annually.

Additionally, according to the U.S. Chamber Institute for Legal Reform's research, Tort Costs in America, the tort costs per household in Oklahoma amount to $2,930. This high cost of litigation puts a strain on businesses and ultimately affects consumers who end up bearing the burden through increased prices.

Excessive lawsuits can have devastating effects on small businesses that may not have the resources or legal expertise to defend themselves. These lawsuits often result in settlements, regardless of merit, forcing businesses to pay exorbitant amounts or risk going bankrupt trying to fight back. This creates an environment of fear and uncertainty for businesses, hindering innovation and growth.

How Tort Reforms Benefit Businesses

Tort reforms aim to address these issues by creating a fairer and more predictable legal system for businesses in Oklahoma, encouraging business growth in the Sooner State.

Businesses succeed when there’s balance and predictability in the system. Right now, without strong legal reforms, small business owners, farmers, and employers bear the brunt of unpredictably high litigation costs, making Oklahoma less competitive and stifling investment opportunities.

Package of Lawsuit Reforms Closer to Governor Stitt's Desk

Recognizing the pressing need for reform, Senate Pro Tem Lonnie Paxton, Majority Floor Leader Julie Daniels, Judiciary Chairman Brent Howard, Assistant Floor Leader Todd Gollihare, Sen. Aaron Reinhardt, and the Republican Caucus of the Oklahoma Senate, passed seven robust lawsuit reforms off the Senate floor this week. The bills now advance to the House, where they'll need to receive consideration before they can head to the desk of Governor Kevin Stitt.

The Governor first called for these reforms at a business summit he hosted last fall and reiterated that call in his pre-State of the State press conference. Leaders in the legislature are working in collaboration with business leaders, the medical community, and the Oklahoma Chamber of Commerce, to advance targeted legislative solutions designed to restore fairness and efficiency to Oklahoma's legal environment. Key provisions include reforms to public nuisance law, caps on non-economic damages, and measures to expose secretive third-party litigation funders.

Breaking Down the 2025 Tort Reform Package

Here’s a closer look at the reforms included and why they matter for Oklahoma’s businesses and residents:

Cap on Non-Economic Damages

The reinstatement of a $500,000 cap on non-economic damages (purely subjective damages such as pain and suffering) is a critical step in preventing excessive and unpredictable verdicts. Following the removal of these caps in 2019, businesses faced skyrocketing costs and uncertainty. Restoring the cap will create a more predictable environment, reducing strain on businesses and healthcare providers.

Visibility into Third-Party Litigation Funding (TPLF)

Secretive litigation funders often exploit the legal system, funding speculative lawsuits to turn a profit. This reform ensures transparency, making third-party litigation agreements discoverable and banning funding from foreign adversaries. Protecting Oklahoma businesses from these hidden threats safeguards both the economy and the justice system.

Phantom Damages Reform

Plaintiffs will no longer be able recover "phantom damages" based on inflated medical bills rather than amounts actually paid for medical care. This reform ensures fair and accurate compensation while preventing artificially inflated awards.

Public Nuisance Reform

Following a pivotal Oklahoma Supreme Court ruling in the Johnson & Johnson case, the reforms further clarify public nuisance law to prevent misuse by plaintiff lawyers to target businesses unfairly. This change shields businesses from undue liability while maintaining accountability in legitimate cases.

Business Courts

A new business court system will speed up the resolution of commercial disputes. Streamlining these cases ensures fair outcomes and reduces the overall cost and time investment for businesses involved in the legal process.

Strengthening Offer of Judgment Laws

By encouraging the settlement of frivolous lawsuits, this reform increases the cost-risk for those pursuing weak claims, incentivizing fairer and faster resolutions.

Rein in Inflated Property Insurance Claims

Reforms addressing discovery abuses in property insurance claims help curb runaway litigation costs for property disputes, protecting both businesses and consumers. Additional reform to limit the use of one-way fee shifts in property insurance litigation will help rein in high property insurance rates in the state.

The Ripple Effect of Reform

Tort reforms in Oklahoma are about more than lawsuits; they’re about the people and communities these lawsuits impact. When businesses thrive, they hire more workers, invest in local communities, and develop more innovative products. The savings generated from legal reforms benefit everyone—from consumers enjoying lower prices to workers receiving better wages and benefits.

Oklahoma is not alone. States like Georgia are making similar significant moves and prioritizing comprehensive tort reforms that protect businesses and enable communities to prosper.

The Bottom Line: All Policy is Local

For small businesses in rural Oklahoma, like independent farmers or shop owners, being hit with a frivolous lawsuit can be devastating. Insurance premiums rise, operating costs increase, and the ability to reinvest in equipment or materials disappears. Tort reform ensures these businesses can focus on contributing to their communities instead of defending against meritless claims.

This is a clear example of how all policy is local–a message echoed at the 2025 State of American Business–as these reforms will directly impact the businesses and families that form the backbone of Oklahoma’s economy.

Now is Oklahoma’s time to lead again. With a clear vision from Gov. Stitt and broad support in the Senate, the 2025 tort reform package holds the promise of a brighter future—for businesses, employees, and citizens alike.