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.


101 Ways to Improve State Legal Systems: A User's Guide to Promoting Fair and Effective Civil Justice

September 10, 2015 | 101 Ways to Improve State Legal Systems offers some of the many options available to foster a sound legal system. It considers fair and effective measures to improve the litigation process, promote rational liability rules, and rein in excessive awards.

The ILR Research Review - Volume 2

May 18, 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.

Additional Resources

All Results for Lawsuit Abuse Impact

Can a Louisiana Plaintiffs' Attorney Stop LSU Running Back Fournette?

September 30, 2015 | Insights

Enjoy this funny plaintiffs' lawyer ad spoof from ... Read More »

In the News Today - September 22, 2015

September 22, 2015 | Insights

The Oklahoman editorial board notes the state's improved ranking (33rd) in the 2015 Lawsuit Climate rankings, writing, "Oklahoma is improving its national reputation regarding lawsuit issues at a time when such issues are growing in importance to businesses." (The Oklahoman) Read More »

National Coverage Continues of ILR's 2015 Lawsuit Climate Survey

September 21, 2015 | Insights

"More business leaders than ever have identified a state's lawsuit climate as a significant factor in determining their growth and expansion plans. States ought to take notice that a good lawsuit climate is vital to their continued job growth," said ILR President Lisa A. Rickard, as quoted in a Corporate Counsel story about the 2015 Lawsuit Climate Survey. Read More »

Is Illinois a 'Depot for the Nation's Lawsuits'?

September 18, 2015 | Insights

ILR President Lisa A. Rickard and Illinois Chamber President Todd Maisch published an op-ed in today's Rockford (IL) Register-Star highlighting Illinois' poor ranking (48th out of 50) in ILR's 2015 Lawsuit Climate Survey.ILR President Lisa A. Rickard and Illinois Chamber President Todd Maisch published an op-ed in today's Rockford (IL) Register-Star highlighting Illinois' poor ranking (48th out of 50) in ILR's 2015 Lawsuit Climate Survey. Read More »

In the News Today - September 17, 2015

September 17, 2015 | Insights

The resignation of former New York Speaker Sheldon Silver after being indicted on "fraud and racketeering" charges related to an asbestos plaintiffs' firm, along with the troubling findings in the Garlock bankruptcy case, could provide momentum for Congress to pass the Fairness in Asbestos Claims Trust (or, FACT) ACT this month. (The Huffington Post) Read More »

In the News Today - September 16, 2015

September 16, 2015 | Insights

Investors Business Daily highlights "the importance of a friendly business climate and how an honest legal climate buoys it." Three-fourths of the lawyers polled (in ILR's 2015 Lawsuit Climate Survey) said that "a state's litigation environment is ‘likely to affect important business decisions such as where to locate or do business.'" (Investors Business Daily) Read More »

Illinois Editorial Calls for Legal Reform in Wake of 2015 Lawsuit Climate Survey Results

September 16, 2015 | Insights

The Bloomington (IL) Pantagraph and Decatur (IL) Herald & Review editorialize on Illinois' poor ranking in ILR's 2015 Lawsuit Climate Survey. Read More »

In the News Today - September 15, 2015

September 15, 2015 | Insights

"The Justice Department wants the message to go out that federal prosecutors will be taking aim at executives" as part of a new enforcement policy that requires companies to identify every employee within the company that may be involved in infractions alleged by prosecutors. (New York Times) Read More »

ILR's Lawsuit Climate Survey Continues to Gain Wide Media Coverage

September 14, 2015 | Insights

"Illinois is a litigation haven that beckons to trial lawyers across the nation, and it's hurting your state's reputation," said ILR President Lisa A. Rickard, as quoted in a syndicated Illinois News Network story that ran in publications throughout Illinois over the weekend. Read More »

  • bulletClick to Narrow Your Results