WASHINGTON, D.C.—California could save up to $5.3 billion in tort costs and create between 104,000 and 283,000 new jobs by improving its legal environment, according to a working paper released today by the U.S. Chamber Institute for Legal Reform (ILR).

The report, Creating Conditions for Economic Growth: The Role of the Legal Environment, was conducted by NERA Economic Consulting for ILR. Using a first-of-its-kind econometric model, the report establishes a legal environment benchmark to identify excessive tort costs.

If California were to improve its legal environment to the level of the report’s benchmark, the state could reduce tort costs by 16.4% ($5.3 billion) and potentially increase employment by between .65% and 1.76%, which translates to 104,000-283,000 new jobs.

“In today’s tough economic climate, Californians are looking for ways to create more jobs while dealing with tight budgets. This new report shows that improving California’s legal environment can deliver significant economic benefits,” said Lisa A. Rickard, president of the U.S. Chamber Institute for Legal Reform.

The model used in the study incorporates a variety of factors to determine a state’s legal environment, including the perceived fairness of the legal system, the concentration of lawyers in the state, the number of tort cases filed per year and the number of major verdicts in the state.

A copy of the working paper is available here.

ILR seeks to promote civil justice reform through legislative, political, judicial, and educational activities at the national, state, and local levels.

The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.

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