Lawsuit Abuse Impact

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 hurts families, businesses, communities, and America's ability to compete for jobs and investment in a global economy. Read More...

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 trial 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 2017, New York City had to spend $722 million on civil litigation costs – which comes to approximately $85 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.

Suggested Resources

Research

All Results for Lawsuit Abuse Impact

  1. Torts of the Future II: Addressing the Liability and Regulatory Implications of Emerging Technologies

    April 18, 2018 | Research

    The second edition of ILR's Torts of the Future research examines evolutions in regulatory and liability trends for emerging technologies including artificial intelligence, virtual reality, wearable devices, and 3D printing. The research also presents a number of updated guiding principles to inform courts, legislators, and policymakers as they seek to address privacy and safety concerns without derailing or delaying innovation.... Read More

  2. In the News Today - April 12, 2018

    April 12, 2018 | News

    Class Action Against Odwalla for Allegedly Misleading "No Added Sugar" Label Hits Headwinds, As Product Does Not Actually Contain Added Sugar... Read More

  3. Third Party Funders Admit: "We Make it Harder and More Expensive to Settle Cases"

    March 21, 2018 | News

    In a Wall Street Journal story on the litigation finance industry today, Allison Chock, the Chief Investment Officer for third-party litigation giant IMF Bentham, said she understands perfectly well why her industry faces criticism from civil justice groups. "We make it harder and more expensive to settle cases," she stated.... Read More

  4. In the News Today - March 21, 2018

    March 21, 2018 | News

    Controversial class action settlement changed after intervention from AGs, DOJ and CCAF: In response to intervention from the Department of Justice, 19 State AGs, and civil justice groups, a controversial class action settlement proposal in the "Wines ‘Til Sold Out" case has been revised by defendants.... Read More

  5. The Great Myths of State False Claims Acts

    February 28, 2018 | Research

    The 2018 update to "Great Myths of State False Claims Acts" shows that the whistleblowers' bar is continuing to capitalize on state qui tam False Claims Acts (FCAs), harvesting windfall awards from states and the federal government. The paper also points out that the dubious benefits of implementing a state FCA turn into a clear financial net negative when states allow their FCAs to fall out of compliance with federal standards.... Read More

  6. In the News Today - February 16, 2018

    February 16, 2018 | News

    House Passes Bill to Curb ADA Lawsuit Abuse; West Virginia Senate Passes Intermediate Court Bill... Read More

  7. "Lawsuit Abuse Threatens Manufacturing"

    February 15, 2018 | News

    In a Pittsburgh Business Times op-ed, the president of the Pennsylvania Manufacturers Association said the state's "trial lawyer-friendly environment allows frivolous litigation that costs all Pennsylvanians."... Read More

  8. Top 10 Legal Reform Research Topics of 2017

    January 11, 2018 | News

    Review ILR's wide-ranging top ten legal reform research topics from 2017 and gain insights for 2018.... Read More

  9. In the News Today - January 10, 2018

    January 10, 2018 | News

    Florida Appeals Court, Regulator Reject Curbing "Assignment of Benefits" Lawsuit Abuse; Attorneys Duel Over Fee Split In $785M Pfizer FCA Settlement... Read More

  10. Report: West Virginia Legal Climate Improving; Should Stay on a Reform Path

    January 10, 2018 | News

    A new study from the Institute for Legal Reform, West Virginia's Climb: Lawsuit Climate Progress in the Mountain State and the Path Ahead, highlights major improvements in the state's civil justice system over the last three years. ... Read More