Study: U.S. Tort System Costs $429 Billion
WASHINGTON--(BUSINESS WIRE)--Oct 24, 2018--A new report released today by the U.S. Chamber Institute for Legal Reform (ILR) shows that the cost and compensation paid in the U.S. tort system totaled $429 billion—or 2.3 percent of the U.S. gross domestic product (GDP)—in 2016. Despite those numbers, the study shows that the system delivered only 57 cents of every dollar in compensation to plaintiffs, while the rest went to attorneys’ fees, administrative and insurance costs.
ILR released Costs and Compensation of the U.S. Tort System at its “Summit XX: Law, Policy, & Politics” event, which features a keynote address by Rachel, the world’s first digital human, along with IBM Distinguished Engineer Richard Darden, as well as a discussion with Florida Attorney General Pam Bondi.
Costs and Compensation estimates each state’s tort costs as a percentage of state GDP and per household. The study concludes that costs in the most expensive states like California, Florida, New York, and New Jersey are up to 2.1 times higher than in the least expensive states.
“Historically, we have the most expensive tort system in the world, but cost does not equal value when little more than half of each dollar goes to plaintiffs,” said ILR President Lisa A. Rickard. “Our tort system totaled about $3,330 per household—or almost double the average cost of putting gas in your car—an alarming trend when you consider that over 40 cents per dollar go to attorneys’ fees and other costs.”
“Summit XX” brings together top experts to explore what’s trending in law, policy, and politics, including Department of Justice enforcement, data privacy liability, U.S.-style class actions in Europe, trial lawyer advertising, and locality litigation.
At the event, ILR also released A Rising Threat: The New Class Action Racket That Harms Investors and the Economy, which shows that securities class action lawsuit filings are skyrocketing. According to the study, in 2017 at least 412 securities class actions were filed—more than double the average annual case filings from the last 20 years. And within that number, 85 percent of merger and acquisition deals worth $100 million or more were the subject of a securities class action.
As part of “Summit XX,” ILR is recognizing key individuals and organizations working to improve the litigation environment across the globe, including Vermont Governor Phil Scott, among others. More information about the recipients is available here.
ILR seeks to promote civil justice reform through legislative, political, judicial, and educational activities at the national, state, and local levels.
The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.
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CONTACT: U.S. Chamber Institute for Legal Reform
Justin Hakes, 202-329-0608
KEYWORD: UNITED STATES NORTH AMERICA DISTRICT OF COLUMBIA
INDUSTRY KEYWORD: PUBLIC POLICY/GOVERNMENT CONGRESSIONAL NEWS/VIEWS OTHER POLICY ISSUES PUBLIC POLICY WHITE HOUSE/FEDERAL GOVERNMENT PROFESSIONAL SERVICES LEGAL
SOURCE: U.S. Chamber Institute for Legal Reform
Copyright Business Wire 2018.
PUB: 10/24/2018 09:44 AM/DISC: 10/24/2018 09:44 AM