Oct. 31, 2018 (WASHINGTON) – A new report released by the U.S. Chamber Institute for Legal Reform (ILR) further highlights both the overall cost and inefficiencies of the tort system in the United States.
“The ILR’s Costs and Compensation of the U.S. Tort System report very effectively demonstrates the need for a balanced civil justice system in our country,” ATRA President Tiger Joyce said. “We applaud the ILR for conducting this extensive study and releasing new figures on the total cost of the tort system in the U.S. It will be very important in the ongoing reform efforts.”
The ILR’s study states than the cost and compensation paid in the U.S. tort system totaled $429 billion in 2016, accounting for 2.3 percent of the U.S. gross domestic product. Previous reports state that when compared internationally, U.S. liability costs as a percentage of GDP are 2.6 times the average of our European counterparts. Further, the report states that the system delivered just 57 cents of every dollar in compensation to plaintiffs. The remainder went to attorneys’ fees and administrative and insurance costs.
The American Tort Reform Association recently released six individual studies looking at excessive tort costs in California, Florida, Illinois, Louisiana, Missouri, and West Virginia. These studies detail job loss, personal income loss, annual direct costs, and annual loss to state revenues due to the excessive tort costs in those states, and, as with the ILR report, highlight the need for reform of the legal system.
