New Study Further Highlights Need for Reform: Study estimates cost of US tort system at $429 billion

Press Releases | October 31, 2018

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 […]

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.

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About the American Tort Reform Association (ATRA): Founded in 1986, ATRA is a nonpartisan, nonprofit organization with affiliated coalitions in more than 40 states. It is the nation’s only organization dedicated exclusively to reforming the civil justice system through education and legislative enactment, and acts as a nationwide network of state-based liability reform coalitions backed by 135,000 grassroots supporters. ATRA works to bring greater fairness, predictability and efficiency to America’s civil justice system. Those efforts have resulted in the enactment of state and federal laws that make the system fairer for everyone.