America’s lawsuit system is getting more expensive. According to a recent economic study released by ILR, Tort Costs in America, the costs and compensation paid into the U.S. tort system totaled $443 billion in 2020, or 2.1 percent of the U.S. gross domestic product (GDP), and $3,621 per household. The study also found that only 53 cents of every dollar go to plaintiffs. The rest covers litigation costs and other expenses.
These eye-popping numbers show that our lawsuit system is expensive, inefficient and broken. As a result, every household in the U.S. is footing the bill through higher prices on everything from household products, services and insurance costs.
Our research also estimated every state’s tort cost as a percentage of state GDP and per household cost. Tort system costs in the most expensive states are up to 2.7 times larger than in the least expensive states. For example, tort costs per household came to about $2,000 in states like Maine, New Hampshire, and South Dakota, but reached over $4,500 in states like California, Florida, and New Jersey.
Here are the top eight states with the highest tort costs per household.
The total tort costs per household in Louisiana in 2020 totaled $4,018.
The total tort costs per household in Georgia totaled $4,157. Georgia also ranked eighth among the states for the most nuclear verdicts (a jury verdict greater than $10 million) per capita from 2010–2019, according to ILR’s Nuclear Verdicts research.
The total tort costs per household in Connecticut were $4,271. Connecticut’s tort costs accounted for 2.14% of state GDP.
The tort costs per household in California totaled $4,599. California also ranked fifth for the most nuclear verdicts per capita from 2010 – 2019, according to ILR’s Nuclear Verdicts research.
4: New Jersey
The tort costs in New Jersey totaled $5,059 per household.
The tort costs in Florida totaled $5,065 per household. In addition to being the third state with the most expensive tort costs, Florida ranked fifth for the most nuclear verdicts per capita from 2010–2019, according to ILR’s Nuclear Verdicts research.
It’s not all bad news: Florida is tackling its troubled lawsuit system head-on during its upcoming legislative session with a comprehensive legal reform package to protect consumers and businesses from abusive and excessive lawsuits.
2: New York
The tort costs in New York totaled $5,408 per household. New York is known for having a complex and lengthy legal process, which can result in higher attorneys’ fees, court costs, and other expenses. New York ranked second for the most nuclear verdicts per capita from 2010–2019, according to ILR’s Nuclear Verdicts research.
Lastly, Delaware comes in at #1, with tort costs reaching $5,480 per household.
The high price tag of the tort system should have every person questioning whether the system works if only 53 cents of every dollar go to plaintiffs yet costs household thousands per year.
As The Wall Street Journal recently wrote in an editorial on the report, “We’re hard-pressed to think of another industry whose existence costs the average American family more than $3,000 a year. Too bad there isn’t a way to sue the plaintiffs’ bar for a refund.”
Want to see where your state ranks? You can find out on our Issues by State page.