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. In the News Today - March 21, 2018

    March 21, 2018 | News

    Controversial class action settlement changed after intervention from AGs, DOJ and CCAF: In response to intervention from the Department of Justice, 19 State AGs, and civil justice groups, a controversial class action settlement proposal in the "Wines ‘Til Sold Out" case has been revised by defendants.... Read More

  2. The Great Myths of State False Claims Acts

    February 28, 2018 | Research

    The 2018 update to "Great Myths of State False Claims Acts" shows that the whistleblowers' bar is continuing to capitalize on state qui tam False Claims Acts (FCAs), harvesting windfall awards from states and the federal government. The paper also points out that the dubious benefits of implementing a state FCA turn into a clear financial net negative when states allow their FCAs to fall out of compliance with federal standards.... Read More

  3. In the News Today - February 16, 2018

    February 16, 2018 | News

    House Passes Bill to Curb ADA Lawsuit Abuse; West Virginia Senate Passes Intermediate Court Bill... Read More

  4. "Lawsuit Abuse Threatens Manufacturing"

    February 15, 2018 | News

    In a Pittsburgh Business Times op-ed, the president of the Pennsylvania Manufacturers Association said the state's "trial lawyer-friendly environment allows frivolous litigation that costs all Pennsylvanians."... Read More

  5. Top 10 Legal Reform Research Topics of 2017

    January 11, 2018 | News

    Review ILR's wide-ranging top ten legal reform research topics from 2017 and gain insights for 2018.... Read More

  6. In the News Today - January 10, 2018

    January 10, 2018 | News

    Florida Appeals Court, Regulator Reject Curbing "Assignment of Benefits" Lawsuit Abuse; Attorneys Duel Over Fee Split In $785M Pfizer FCA Settlement... Read More

  7. Report: West Virginia Legal Climate Improving; Should Stay on a Reform Path

    January 10, 2018 | News

    A new study from the Institute for Legal Reform, West Virginia's Climb: Lawsuit Climate Progress in the Mountain State and the Path Ahead, highlights major improvements in the state's civil justice system over the last three years. ... Read More

  8. WV's "State of the State" on Legal Reform: Improving

    January 10, 2018 | Blogs

    Ahead of West Virginia Governor Jim Justice's "State of the State" address on Wednesday night, new research from the U.S. Chamber Institute for Legal Reform (ILR) provides a snapshot of the state's past accomplishments and future opportunities on legal reform.... Read More

  9. West Virginia's Climb: Lawsuit Climate Progress in the Mountain State and the Path Ahead

    January 10, 2018 | Research

    West Virginia has begun shedding its reputation for having one of the worst civil justice systems in the nation. The state's lawsuit climate ranked dead last or second to last in surveys of business executives and attorneys conducted eleven times over the past fifteen years--until 2017. This report explores the beginning of the state's encouraging transformation and highlights areas where it may continue this progress.... Read More

  10. Top 10 Legal Reform Blogs of 2017

    January 10, 2018 | News

    From TCPA and TPLF commentary, to trial lawyer advertising, review ILR's top ten blogs from 2017.... Read More