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. 

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. 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 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

Frequent Filers: The Problems of Shareholder Lawsuits and the Path to Reform

February 27, 2014 | Frequent filers - professional plaintiff investors who file lawsuit after lawsuit - have been a long-standing phenomenon in shareholder litigation in both state and federal courts. Nearly twenty years ago, Congress attempted to remove professional plaintiffs from federal securities class actions by adopting the Private Securities Litigation Reform Act (PSLRA) of 1995. Yet, this legislation fell short of achieving its goal of eliminating professional plaintiffs.

The New Lawsuit Ecosystem: Trends, Targets and Players

October 23, 2013 | Authored by a distinguished group of practitioners, this report examines the developing lawsuit "ecosystem" and areas of litigation of most concern to the business community.

Additional Resources

All Results for Lawsuit Abuse Impact

WATCH: Washington Legal Foundation Briefing on Lawsuit-Generating FDA Generics Labeling Proposal

Author: Harold Kim | April 11, 2014 | Insights

The Washington Legal Foundation, in cooperation with the Generic Pharmaceutical Association and the American Enterprise Institute, held a media briefing to discuss the consequences of the FDA's proposed generic labeling requirement. Read More »

Tags: Preemption/ Federalism, Medical Liability, Lawsuit Abuse Impact

Faces of Lawsuit Abuse Wins Four Internet Advertising Awards

April 08, 2014 | Insights

We are pleased to announce that ILR's Faces of Lawsuit Abuse national public awareness campaign has been awarded four separate Internet Advertising Competition Awards from the Web Marketing Association. Read More »

Tags: Lawsuit Abuse Impact

Litigiousness Hits Floridians in the Pocket

March 26, 2014 | Insights

Florida families pay about $3,400 each year for something most people don't even know about - lawsuits. Read More »

Tags: Lawsuit Abuse Impact, Florida

In the News Today - March 25, 2014

March 25, 2014 | Insights

Families in Florida are spending more on goods and services due to the costs of litigation. Read More »

Tags: Arbitration, Lawsuit Abuse Impact, Securities Litigation Reform, Delaware, Florida

In the News Today - March 21, 2014

March 21, 2014 | Insights

A majority of West Virginia voters think lawsuits are hurting job creation in the state, a new poll found. Read More »

Tags: Lawsuit Abuse Impact, West Virginia, Delaware

Improper Gulf Oil Spill Payments Undermine Integrity of Justice System

Author: Harold Kim | March 19, 2014 | Insights

If businesses see that the courts effectively sanction a settlement process that undermines good faith and games the system, then the BP settlement experiment will be a failure, and case-by-case litigation may be the only practical path. Read More »

Tags: Lawsuit Abuse Impact, Environmental Litigation

New OT Rules Could Mean More Lawsuits

March 14, 2014 | Insights

The recent push by the president to change the country's overtime rules could limit opportunities, cut down on teleworking ... and increase lawsuits. Read More »

Tags: Lawsuit Abuse Impact

In the News Today - March 10, 2014

March 10, 2014 | Insights

South Carolina was ranked 39th in ILR's 2012 survey of the 50 states' legal system, but an op-ed in The State says that lawsuit reforms to address the hiring of outside counsel and landowner liability "can restore faith and integrity in the state's civil justice system - at no expense to the taxpayer." Read More »

Tags: Asbestos, Lawsuit Abuse Impact, Illinois, New York, South Carolina

Frequent Filers: The Problems of Shareholder Lawsuits and the Path to Reform

Author: Stephen J. Choi, New York University School of Law; Jessica Erickson, University of Richmond School of Law; & Adam C. Pritchard, University of Michigan School of Law | February 27, 2014 | Research

Frequent filers - professional plaintiff investors who file lawsuit after lawsuit - have been a long-standing phenomenon in shareholder litigation in both state and federal courts. Nearly twenty years ago, Congress attempted to remove professional plaintiffs from federal securities class actions by adopting the Private Securities Litigation Reform Act (PSLRA) of 1995. Yet, this legislation fell short of achieving its goal of eliminating professional plaintiffs. Read More »

Tags: Securities Litigation Reform, Lawsuit Abuse Impact, Mississippi, Louisiana

In the News Today - February 18, 2014

February 18, 2014 | Insights

The oil and gas industry has invested more than $60 billion in south Louisiana, but the state's legal environment is "preventing us from doing all the things that we could do," Louisiana Oil and Gas Association Vice President Gifford Briggs said. Read More »

Tags: Environmental Litigation, Foreign Corrupt Practices Act, Lawsuit Abuse Impact, Louisiana

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