Lawsuit Abuse Impact

The United States is the world leader in lawsuits, which cost the U.S. economy $264 billion per year – or about $850 per year for every man, woman and child in the United States.  That hurts families, businesses, local communities – and America’s ability to compete in the global economy. read more...

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 harms 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. 

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 trail 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 2011, New York City had to spend $550 million on lawsuit costs – which comes to approximately $70 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.

Research

The ILR Research Review

December 18, 2014 | The second issue of the ILR Research Review offers valuable insights from our preeminent experts and specialists on key topics addressed in the latest of ILR's research reports.

Lawsuit Ecosystem II: New Targets, Trends and Players

December 04, 2014 | This report, authored by a distinguished group of practitioners, explores the evolving lawsuit "ecosystem." It considers how plaintiffs' lawyers generate litigation and significant developments that will spur more lawsuits or rein in excessive liability.

Additional Resources

All Results for Lawsuit Abuse Impact

The ILR Research Review

Author: Institute for Legal Reform | December 18, 2014 | Research

The second issue of the ILR Research Review offers valuable insights from our preeminent experts and specialists on key topics addressed in the latest of ILR's research reports. Read More »

Tags: Class Actions Around the Globe, False Claims Act, Foreign Corrupt Practices Act, Foreign Judgment Enforcement, Lawsuit Abuse Impact, State Attorneys General, State Legal Reforms

In The News Today - December 18, 2014

December 18, 2014 | Insights

The former Countrywide Financial Corp. executive who filed a "whistleblower" lawsuit against Countrywide and Bank of America will reportedly collect almost $58 million. Read More »

Tags: Lawsuit Abuse Impact, Legal Ethics

This Week's Madison County, IL Asbestos Docket Reinforces Message of New ILR Awareness Campaign

December 10, 2014 | Insights

Among the 207 asbestos cases set for trial this week in Madison County, IL, only two of the plaintiffs actually live in the county. Further, as the Madison-St. Clair Record reports, only 20 of the plaintiffs even hail from the state of Illinois. Read More »

Tags: Asbestos, Lawsuit Abuse Impact, Legal Ethics, State Legal Reforms, Illinois

Lawsuit Ecosystem II: New Targets, Trends and Players

Author: Victor E. Schwartz & Cary Silverman, Shook, Hardy & Bacon LLP | December 04, 2014 | Research

This report, authored by a distinguished group of practitioners, explores the evolving lawsuit "ecosystem." It considers how plaintiffs' lawyers generate litigation and significant developments that will spur more lawsuits or rein in excessive liability. Read More »

Tags: State Legal Reforms, State Attorneys General, Securities Litigation Reform, Lawsuit Abuse Impact, False Claims Act, Class Actions, Asbestos

Laboratories of Tort Law: A Three-Year Review of Key State Supreme Court Decisions

Author: Victor E. Schwartz & Cary Silverman, Shook, Hardy & Bacon LLP | December 04, 2014 | Research

This report highlights significant tort law decisions over the past three years that are examples of particularly sound or unsound rulings. Each analysis examines the tort law principles involved, whether the court followed or deviated from these principles, and the court's reasoning in reaching its decision. Read More »

Tags: State Tort Reform, State Legal Reforms, Medical Liability, Lawsuit Abuse Impact, Class Actions, Asbestos

An Election Night Wave for Legal Reform

Author: Lisa A. Rickard | November 06, 2014 | Insights

On Tuesday, voters went to the polls across the country. They delivered a clear message that they want a new direction, one focused on jobs and economic growth. Read More »

Tags: Lawsuit Abuse Impact

In The News Today - November 6, 2014

November 06, 2014 | Insights

An op-ed in the Wall Street Journal by House Speaker John Boehner and Senate Minority Leader Mitch McConnell highlights "excessive regulations and frivolous lawsuits that are driving up costs for families and preventing the economy from growing" as one of the top priorities for reform under the newly elected Republican majority in the House and Senate. Read More »

Tags: Lawsuit Abuse Impact, Legal Ethics, Medical Liability, California

Lawsuit Abuse? There's an App for That

Author: Harold Kim | October 29, 2014 | Insights

"Block Calls Get Cash"-an Android app being marketed by Lemberg Law, a self-described consumer protection law firm. The firm says the app can help those who download it determine whether they have a claim under the Telephone Consumer Protection Act (TCPA), in which case they could win up to $1,500 per robodial or debt collection call. Read More »

Tags: Telephone Consumer Protection Act (TCPA), Legal Ethics, Lawsuit Abuse Impact

The High Cost of Lawsuit Abuse

October 14, 2014 | Insights

The United States has the world's costliest legal system. What's driving up the costs? Read More »

Tags: Lawsuit Abuse Impact

Fmr. FBI Director: Order Return of $240K in Questionable Oil Spill Settlement Cash

October 09, 2014 | Insights

Former FBI director Louis Freeh, who is serving as a special master overseeing "potential fraud" in the BP Gulf oil spill claims process, has asked a federal judge to "order the return of nearly $240,000 paid to an Alabama boat captain he accused of reporting fake losses in shrimping revenue" caused by the spill. Read More »

Tags: Lawsuit Abuse Impact, Legal Ethics

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