According to research from the Institute for Legal Reform, one of Indiana’s most expensive taxes doesn’t appear on any government form. Every Indiana household pays almost $3,000 due to Indiana’s tort costs on average. For most families, that’s a semester of community college, a used car, or the difference between saving and slipping into debt. Instead, it’s disappearing into a legal maze that lawmakers have the power to fix. A new ILR paper points to solutions.

Building on a Legacy of Leadership

Indiana has long been a trailblazer in legal reform.  Since 1975, when the state adopted groundbreaking medical liability reform, state lawmakers have fought to preserve a stable legal environment that fosters economic growth while preserving protections for Hoosiers. When the U.S. Supreme Court observed in 1991 that punitive damages had “run wild” nationwide, Indiana stepped up with measured reforms that promoted fairness and accountability.

But maintaining a competitive business climate requires constant vigilance. For a small business, one lawsuit can mean the difference between growth and closure. For a hardworking family, a dysfunctional lawsuit system means higher prices, fewer job opportunities, and money diverted from paychecks to legal costs. As new litigation tactics emerge, from misleading lawsuit advertising to the creative misuse of public nuisance claims, Indiana must act decisively to preserve its economic momentum.

The Cost of Inaction Is Real

Other states are already reaping the benefits of bold action. Florida’s recent legal reforms produced double-digit insurance rate decreases and put money directly back into residents’ pockets through refunds. While Indiana has a more business-friendly legal environment than Florida did when it started to reform, the state would still benefit significantly from commonsense fixes. Reducing litigation costs in Indiana would lower insurance rates, improve affordability, and cement the state’s position as a top destination for business investment.

The Institute for Legal Reform’s latest research, ILR Briefly: Indiana’s Liability Environment and Opportunities for Legal Reform, identifies six concrete steps the legislature can take as part of a multi-year effort to improve Indiana’s litigation environment.  With a clear roadmap in hand, the time to act is now to protect Hoosier families and businesses from escalating litigation costs.

Six Steps to Strengthen Indiana’s Future

The reforms are practical and proven.

• Codify public nuisance law to prevent its transformation into a “super tort” that targets manufacturers of lawful products with sweeping liability.
• Limit noneconomic damages in personal injury cases to bring predictability to pain and suffering awards that can currently vary wildly from case to case.
• Address misleading lawsuit advertising that bombards Hoosiers with unrealistic promises of easy money and conditions juries to expect multimillion dollar verdicts as the norm.
• Encourage people to resolve disputes without litigation by raising the costs of rejecting reasonable settlement offers, providing meaningful deterrence against frivolous litigation that wastes everyone’s time and money.
• Establish reasonable constraints on negligent security claims that attempt to hold businesses liable for unpredictable criminal acts committed by third parties on business property.
• Allow bifurcated trials to separate liability questions from damages, reducing emotional prejudice and encouraging the impartial decision making that justice demands.

The Opportunity Is Now

Here’s a fact that should motivate every Hoosier: Indiana pays significantly more per household in tort costs than Ohio, both in total dollars and as a percentage of state GDP. No one who roots for the Hoosiers wants to finish second to the Buckeyes.

Indiana has the momentum, the tools, and the track record to strengthen its reputation as a state with a fair legal climate that welcomes business. The General Assembly should build on decades of successful reform by addressing emerging challenges before they undermine the state’s competitive advantage.

Simply put: Indiana’s economy and every Hoosier household stand to gain. The legislature has a chance to close the door on frivolous lawsuits and uncertainty while opening doors to new business investment and economic opportunity.