WASHINGTON, D.C. — A new economic study released today by the U.S. Chamber of Commerce Institute for Legal Reform (ILR) found that the costs and compensation paid in the U.S. tort system totaled $443 billion—or 2.1% of national gross domestic product and $3,621 per household—in 2020. Despite the high price tag, only 53 cents of every dollar go to plaintiffs. The rest covers litigation costs and other expenses.
Tort Costs in America: An Empirical Analysis of Costs and Compensation of the U.S. Tort System also estimates every state’s tort cost as a percentage of state gross domestic product 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.
Among the states with the highest tort costs per household:
- New York ($5,408)
- Florida ($5,065)
- New Jersey ($5,059)
- California ($4,599)
- Georgia ($4,157)
“The costs of the U.S. tort system are skyrocketing, but cost does not equal value when only 53 cents of every dollar go to plaintiffs,” said U.S. Chamber Institute for Legal Reform President and U.S. Chamber Chief Legal Officer and Executive Vice President Harold Kim. “Tort Costs in America shows that our lawsuit system is expensive and broken. Every household in the U.S. is footing the bill—through higher prices on everything from household products, services, and insurance costs—for a system that serves them poorly, if at all.”
Tort Costs in America was conducted by the Brattle Group on behalf of ILR and can be downloaded and viewed here.