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.

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. Read More...

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

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

    April 18, 2018

    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

  • 2017 Lawsuit Climate Survey: Ranking the States

    2017 Lawsuit Climate Survey: Ranking the States

    September 12, 2017

    The 2017 Lawsuit Climate Survey: Ranking the States was conducted for the U.S. Chamber Institute for Legal Reform by Harris Poll to explore how fair and reasonable the states' liability systems are perceived to be by U.S. businesses. Read More

All Results for Lawsuit Abuse Impact

  1. State Lawsuit Climate Impact On Display As Amazon's HQ2 Search Continues, ILR's Rickard Says

    August 28, 2018 | News

    The effects of a state's lawsuit climate are now playing out on a national stage as Amazon picks a location for its second headquarters, U.S. Chamber Institute for Legal Reform (ILR) President Lisa A. Rickard said in a new Washington Times op-ed.... Read More

  2. 20 Years of Tech: How ILR Has Led the Legal Conversation on Emerging Technologies

    August 21, 2018 | Blogs

    ILR continues to confront new issues by identifying trends and applying the latest strategies and tactics to advocate for key legal reforms. ... Read More

  3. No Good Deal Goes Un-litigated

    July 18, 2018 | Blogs

    Want to sign a merger deal? You'll probably need to fight a lawsuit before the ink is dry, and it won't be cheap.... Read More

  4. In the News Today - July 3, 2018

    July 03, 2018 | News

    Pace of Securities Lawsuits on Track to Match Historic Highs of 2017; Civil Justice Advocate to Investigate "Objector Blackmail" in Chicago Class Action... Read More

  5. California Coffee Kills

    July 03, 2018 | Blogs

    Or at least, that's what the state's Proposition 65 law might lead you to believe.... Read More

  6. Torts of the Future: Autonomous Vehicles

    May 17, 2018 | Research

    Among all emerging technologies examined in ILR's Torts of the Future research papers, autonomous vehicles (AVs) may be popping up in headlines more than any other. In order to respond to this trend in public policy and interest, and to provide a valuable tool for legislators, regulators, and businesses seeking to learn more about this topic, ILR has compiled insights from two years of research on emerging liability and regulation issues for autonomous vehicles.... Read More

  7. Attorney: Insurance Restatement Filled With "Litigation Fuel"

    May 09, 2018 | News

    At a meeting hosted by the National Council of Insurance Legislators on the American Law Institute's controversial Restatement of the Law of Liability Insurance, the chairman of Shook Hardy & Bacon's Public Policy Group said the restatement's language still has reads as "litigation fuel."... Read More

  8. 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

  9. 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

  10. 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