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 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-Volume 2,
Issue 2

December 22, 2015 | 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.

MDL Proceedings: Eliminating the Chaff

October 27, 2015 | This paper suggests procedural improvements to weed out dubious and fraudulent claims in the early stages of multidistrict litigation (MDL) proceedings to prevent them from becoming "lawsuit magnets."

Additional Resources

All Results for Lawsuit Abuse Impact

Trial Lawyer Ad Spending Last Year More Than Doubles Record Amount Spent on Super Bowl Ads

February 09, 2016 | Insights

Believe it or not the enormous sums spent on Super Bowl ads actually pale in comparison to the amount plaintiffs' attorneys spent on advertising in 2015 alone: $892 million. Read More »

POLL: Missouri Voters Overwhelmingly Support Common Sense Lawsuit Reforms

February 01, 2016 | Insights

"Show me the legal reform." That appears to be the sentiment among the vast majority of Missouri voters, according to a recent poll. Read More »

The ILR Research Review-Volume 2,
Issue 2

December 22, 2015 | Research

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 »

Monkey "Selfies" Tops Annual List of Most Ridiculous Lawsuits

December 20, 2015 | Insights

ILR has released its list of the "Most Ridiculous Lawsuits of 2015." Read More »

PODCAST: Frivolous Lawsuits Have Serious Consequences

November 19, 2015 | Insights

The United States legal system is the most costly in the world, making it a major factor in a business' decision-making process, such as where to expand or relocate. In this podcast, Harold Kim, executive vice president of the U.S. Chamber Institute for Legal Reform, discusses how our legal climate plays an increasingly influential role in a company's planning and operations. We'll also hear Roberto Guerrero, owner of Cumaica coffee in San Francisco share the story of his own legal battle, and his advice for other business owners. Read More »

In The News Today - November 9, 2015

November 09, 2015 | Insights

New York AG Eric Schneiderman's investigation into Exxon Mobil's research and public statements on climate change "marks a dangerous new escalation of the left's attempt to stamp out all disagreement on global-warming science and policy," writes the Wall Street Journal editorial board. Read More »

MDL Proceedings: Eliminating the Chaff

Author: John H. Beisner, Jessica D. Miller, and Jordan M. Schwartz, Skadden, Arps, Slate, Meagher & Flom LLP | October 27, 2015 | Research

This paper suggests procedural improvements to weed out dubious and fraudulent claims in the early stages of multidistrict litigation (MDL) proceedings to prevent them from becoming "lawsuit magnets." Read More »

Legal Dispute Exposes Plaintiffs Getting 'Traded Like Commodities'

October 23, 2015 | Insights

"A legal dispute within a plaintiffs' law firm that organizes massive torts is threatening to pull back the curtain on the mechanics of high-volume litigation," reports Bloomberg's Paul Barrett. Read More »

In the News Today - October 21, 2015

October 21, 2015 | Insights

The U.S. Senate has begun debating a U.S. Chamber-supported cyber security bill that would "make it easier for corporations to share information about cyber attacks with each other or the government without concern about lawsuits." (The Indianapolis Star) Read More »

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