Economic Impact Report Analyzes Excessive Tort Costs on State Economies

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Oct. 15, 2018 (WASHINGTON) – Today, the American Tort Reform Association (ATRA) and Citizens Against Lawsuit Abuse (CALA) released six economic impact studies analyzing excessive tort costs in California, Florida, […]

Oct. 15, 2018 (WASHINGTON) – Today, the American Tort Reform Association (ATRA) and Citizens Against Lawsuit Abuse (CALA) released six economic impact studies analyzing excessive tort costs in California, Florida, Illinois, Louisiana, Missouri and West Virginia.

Each state’s study determines how excessive tort costs impact employment and job loss, gross product output and annual direct costs. The study uses Ohio, a state that historically is seen as having a balanced legal system, as a “control group” to contrast with each of the states.

“An out-of-balance civil justice system leads to job loss in every sector across the nation,” ATRA President Tiger Joyce said. “The costs associated with lawsuit abuse put American workers at a disadvantage, creating fewer employment options and rising prices. The reports demonstrate the need for states to addresses the imbalances in their legal systems as a way to strengthen their economies and provide better opportunities for their citizens.”

The study estimates nearly a half-million permanent jobs were lost due to excessive tort costs in the six states:

  • California: Loss of 197,776 jobs and $11.8 billion in personal income
  • Florida: Loss of 126,139 jobs and $7.5 billion in personal income
  • Illinois: Loss of 81,685 jobs and $4.9 billion in personal income
  • Louisiana: Loss of 15,556 jobs and $945 million in personal income
  • Missouri: Loss of 26,548 jobs and $1.62 billion in personal income
  • West Virginia: Loss of 3,843 jobs and $238 million in personal income

This report used an econometric model relating U.S. litigation costs, as reported over time, to other variables which are both highly correlated with the costs of U.S. litigation and are available at the national and state levels.   This analysis was undertaken in order to estimate the anticipated economic benefit for each of the six states should they adopt the kinds of tort reforms Ohio has enacted.

CALA consists of more than 100,000 advocates nationwide who are committed to reforming our civil justice system in their home states and nationwide.

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The American Tort Reform Association, based in Washington, D.C., is the only independent national organization dedicated exclusively to tort and liability reform through public education and the enactment of legislation. Its members include nonprofit organizations and small and large companies, as well as trade, business and professional associations from the state and national level.

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