Lawsuit Abuse Impact

America has the world’s costliest legal system. As a percentage of our economy, U.S. legal liability costs are double those of the UK, three times higher than those in France and five times higher than those in Japan. Our nation’s litigation addiction hurts families, businesses, communities, and America's ability to compete for jobs and investment in a global economy.

Just as important, lawsuit abuse harms workers and communities across the United States. Consider: Litigation costs small businesses in America over $100 billion per year.  One in three small business owners report that they have been sued or threatened with a lawsuit – and if sued, more than two-thirds say they would likely have to pass legal costs on to consumers, reduce employee benefits and hold off on hiring new employees. Read More...

In other words, the ultimate victims of lawsuit abuse are consumers (in the form of higher prices) and workers (in the form of lost jobs and benefits).

Consider one example of how lawsuit abuse destroyed a business, killed jobs and decimated a community.

For nearly fifty years, gasoline can manufacturer Blitz USA was a pillar of the small town of Miami, Oklahoma.  They produced 75% of all portable gas cans sold in the United States, and more than 100 families depended on Blitz for their livelihoods. 

But then a small group of plaintiffs’ lawyers put Blitz USA out of business.  These trial lawyers concocted a legal theory that sought to blame Blitz for the handful of injuries caused by misuse of gas cans.  The resulting lawsuits forced the company to close its doors.  Over a hundred workers lost their jobs and benefits, and the town of Miami lost one of its most important employers – while the lawyers made millions. The factory has since reopened under foreign ownership but with fewer jobs.

It’s not just businesses that suffer from frivolous litigation. In Huntington, West Virginia, the local school district removed swings from elementary school playgrounds following a lawsuit.  In Rancho Cordova, California, a local community center was forced to close because of an abusive lawsuit. In 2017, New York City had to spend $722 million on civil litigation costs – which comes to approximately $85 for every resident of the city.

From workers on a gas can assembly line to kids in a West Virginia playground, the victims of lawsuit abuse are all around us. Little wonder, then, that nine out of ten American voters believe there are too many meritless lawsuits. Policymakers should take note and enact commonsense reforms to improve America’s lawsuit climate.

Suggested Resources

Research
  • Torts of the Future II: Addressing the Liability and Regulatory Implications of Emerging Technologies

    Torts of the Future II: Addressing the Liability and Regulatory Implications of Emerging Technologies

    April 18, 2018

    The second edition of ILR's Torts of the Future research examines evolutions in regulatory and liability trends for emerging technologies including artificial intelligence, virtual reality, wearable devices, and 3D printing. The research also presents a number of updated guiding principles to inform courts, legislators, and policymakers as they seek to address privacy and safety concerns without derailing or delaying innovation. Read More

  • 2017 Lawsuit Climate Survey: Ranking the States

    2017 Lawsuit Climate Survey: Ranking the States

    September 12, 2017

    The 2017 Lawsuit Climate Survey: Ranking the States was conducted for the U.S. Chamber Institute for Legal Reform by Harris Poll to explore how fair and reasonable the states' liability systems are perceived to be by U.S. businesses. Read More

All Results for Lawsuit Abuse Impact

  1. In the News Today - December 5, 2018

    December 05, 2018 | News

    "American Law Institute: Elite Group of Legal Experts Exerts Growing Influence Over State Law"... Read More

  2. The U.S. Chamber Institute for Legal Reform Commends Judicial Hellholes for Highlighting Nation's Worst Civil Justice Jurisdictions

    December 05, 2018 | Blogs

    Lisa A. Rickard, president of the U.S. Chamber Institute for Legal Reform (ILR),made the following statement on the release of the American Tort Reform Association's (ATRA) Judicial Hellholes 2018/2019:... Read More

  3. In the News Today - December 4, 2018

    December 04, 2018 | News

    Lawsuits Cost New Yorkers More than Any Other State; "Justices Seem Likely to Reinforce U.S. Securities-Fraud Laws"... Read More

  4. Forbes' "Best States for Business" Looks at State Legal Climates

    November 29, 2018 | News

    Forbes' "Best States for Business" report ranked the states on a number of key issues, including a "measure of the best and worst legal climates for businesses compiled by the U.S. Chamber Institute for Legal Reform" (ILR).... Read More

  5. ILR President Lisa Rickard: U.S. Tort System is "Inefficient"

    October 29, 2018 | News

    In a new op-ed in The Hill, U.S. Chamber Institute for Legal Reform (ILR) President Lisa A. Rickard said a new study proves that "Americans are paying a premium" for a tort system "that sometimes fails to deliver... Read More

  6. New ILR Research: U.S. Tort System Cost $429 Billion in 2016

    October 25, 2018 | News

    A new report found that the costs and compensation in the U.S. tort system totaled $429 billion in 2016, according to Law.com.... Read More

  7. Costs and Compensation of the U.S. Tort System

    October 24, 2018 | Research

    The tort system cost Americans $429 billion in 2016. That's the principal finding from ILR's new research, which arrives at that shocking figure by examining data on liability insurance premiums and estimates of the liability exposure of businesses and individuals that are uninsured or self-insured. The research also indicates that only 57 percent of the $429 billion went to plaintiff compensation. The rest went to lawyers' fees and other expenses.... Read More

  8. A Rising Threat: The New Class Action Racket That Harms Investors and the Economy

    October 24, 2018 | Research

    Abusive securities class action lawsuits are imposing huge costs on investors without providing any benefit, and the only winners are the lawyers, who take home millions of dollars in fees. This research documents how the plaintiffs' bar has adapted to the litigation reforms of the ‘90s to launch a new wave of securities class actions-one that is already reaching record heights.... Read More

  9. State Lawsuit Climate Impact On Display As Amazon's HQ2 Search Continues, ILR's Rickard Says

    August 28, 2018 | News

    The effects of a state's lawsuit climate are now playing out on a national stage as Amazon picks a location for its second headquarters, U.S. Chamber Institute for Legal Reform (ILR) President Lisa A. Rickard said in a new Washington Times op-ed.... Read More

  10. 20 Years of Tech: How ILR Has Led the Legal Conversation on Emerging Technologies

    August 21, 2018 | Blogs

    ILR continues to confront new issues by identifying trends and applying the latest strategies and tactics to advocate for key legal reforms. ... Read More