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 Trends, Targets 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

WSJ Accuses Feds of "Prosecutorial Abuse," Urges Schneiderman to "Throw Out" Case Against Greenberg

February 20, 2015 | Insights

Last month, The Wall Street Journal editorial board criticized the U.S. Department of Justice for "prosecutorial abuse" for "hiding potentially exculpatory evidence involving former AIG CEO Hank Greenberg" that the feds wouldn't allow Greenberg to make public. Read More »

Tags: Lawsuit Abuse Impact, Legal Ethics, New York

FLASHBACK: The Anti-Vaccine Movement And A Trial Lawyer-Funded Climate Of Fear

Author: Lisa A. Rickard | February 13, 2015 | Insights

A timely re-post of ILR President Lisa A. Rickard's April 2014 Forbes op-ed. Read More »

Tags: Legal Ethics, Lawsuit Abuse Impact

In The News Today - February 12, 2015

February 12, 2015 | Insights

"As a full body of the House, we continue to work on the tort reform issues to end the lawsuit abuse possibilities that hinder jobs from coming to our State," writes West Virginia Delegate Michael Moffatt in an op-ed providing a state legislative update. Read More »

Tags: State Legal Reforms, Lawsuit Abuse Impact, West Virginia, Nevada

In The News Today - January 22, 2015

January 22, 2015 | Insights

"Kentucky is a haven for personal injury lawyers who run settlement-mills that wring millions of dollars from our state's businesses and caregivers," writes Michael C. Adams, senior counsel to the Kentucky-based Partnership for Commonsense Justice. Read More »

Tags: Lawsuit Abuse Impact, Legal Ethics, State Legal Reforms, Kentucky

In The News Today - January 21, 2015

January 21, 2015 | Insights

A federal judge this week signaled that he may allow BP to pay fines over the Gulf Oil Spill in installments, rather than a lump sum. Read More »

Tags: Lawsuit Abuse Impact, Legal Ethics

Investor's Business Daily Highlights ILR's "Most Ridiculous Lawsuits of 2014"

January 08, 2015 | Insights

Investor's Business Daily's "Capital Hill" column highlights ILR's "Most Ridiculous Lawsuits of 2014," noting, "in our litigious nation, frivolous and abusive lawsuits have become commonplace." Read More »

Tags: Lawsuit Abuse Impact

Mississippi Columnist Highlights AG Hood's Plaintiff Lawyer Partnerships

January 05, 2015 | Insights

Jackson (MS) Clarion-Ledger columnist Sid Salter highlights a recent New York Times piece, which lists Mississippi Attorney General Jim Hood's "as one of the nation's primary examples among state attorneys general of what the newspaper identified as a 'partnership' between 'plaintiffs' lawyers with state attorneys general to sue companies." Read More »

Tags: State Attorneys General, Legal Ethics, Lawsuit Abuse Impact, Mississippi

In The News Today - January 5, 2015

January 05, 2015 | Insights

The New York Daily News calls for the ouster of Sheldon Silver as Speaker of the New York House, due to Silver's failure to disclose his work for Goldberg & Iryam, "a law firm that specializes in disputing city tax bills on behalf of building owners." Read More »

Tags: Lawsuit Abuse Impact, State Legal Reforms, Colorado, New York

LABI President Highlights 2014 Legal Reforms, ILR Recognition

December 30, 2014 | Insights

In an op-ed recapping the business community's 2014 accomplishments in Louisiana, Louisiana Association of Business & Industry (LABI) President Stephen Waguespack details the passage of key legal reforms in the state. Read More »

Tags: State Legal Reforms, Legal Ethics, Lawsuit Abuse Impact, Louisiana

New Faces of Lawsuit Abuse Video Highlights Federal Raid on Gibson Guitar

December 26, 2014 | Insights

ILR unveiled a new Faces of Lawsuit Abuse video this week, detailing the 2011 federal raid on Gibson Guitar for alleged violations of the Lacey Act. Read More »

Tags: Lawsuit Abuse Impact

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