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. Chamber Calls For Swift Action On Small Business Liability Reform Bill

    May 09, 2001 | Press Release

    WASHINGTON, D.C., May 10, 2001 - The United States Chamber of Commerce called the introduction today of legislation that would help to prevent lawsuit abuse that targets small businesses, while protecting the rights of those with legitimate claims, long overdue "Small businesses too often settle lawsuits for large sums regardless of the merits, in fear of being crushed by the weight of unlimited punitive damage awards," said Thomas Donohue, Chamber President and CEO. "The legal fees alone from one lawsuit - frivolous or not - can put a small company out of business."... Read More

  2. Chamber Targets Excessive Legal Fees

    March 13, 2001 | Press Release

    WASHINGTON, D.C. - The United States Chamber of Commerce and the U.S. Chamber Institute for Legal Reform (ILR) filed Freedom of Information Act (FOIA) requests in 21 states today, seeking all documents and contracts pertaining both to the hiring of outside counsel in tobacco litigation and to the size of the attorneys' fees. The Chamber also called on Congress to investigate the excessive legal fees.... Read More

  3. Chamber Blasts Senate Commerce Bill Criminalizing Product Liability Laws

    September 24, 2000 | Press Release

    WASHINGTON, D.C., Sept. 25, 2000 - The United States Chamber of Commerce strongly opposed legislation that would add criminal penalties to product liability laws covering auto equipment and cars, in a letter sent to Senators. "Adding criminal penalties to product liability laws will not create safer products," said Bruce Josten, Chamber executive vice president. "There already are numerous ways that consumers can punish companies for defective products, both through punitive damage awards in civil cases or through criminal penalties for fraud."... Read More

  4. Chamber Calls Florida Verdict Obscene

    July 13, 2000 | Press Release

    WASHINGTON, D.C., July 14, 2000 - The United States Chamber of Commerce called today's decision by a Florida jury, awarding defendants in a tobacco case $145 billion dollars in punitive damages, "an obscene symptom of a court system that is out-of-control. "Trial lawyers have subverted the legal system for their own financial gain," said Bruce Josten, Chamber Executive Vice President. "Legitimate, but politically out-of-favor businesses have been attacked by attorneys driven by the prospect of absurd punitive damage awards."... Read More

  5. Chamber Says Product Liability Bill Restores Legal Fairness, Protects Small Business

    February 15, 2000 | Press Release

    WASHINGTON, D.C., Feb. 16, 2000 - Legislation passed by the House of Representatives today will reform product liability laws to protect small businesses from costly and frivolous lawsuits that could jeopardize their future, the United States Chamber of Commerce said.... Read More

  6. Chamber Calls Trial Lawyer Political Contributions a Wake-Up Call for Business

    January 24, 2000 | Press Release

    WASHINGTON, D.C., Jan. 24, 2000 - The United States Chamber Institute for Legal Reform says a new website, "Tracking the Trial Lawyers," tracks how trial lawyers are pouring massive contributions into political campaigns to prevent the election of pro-legal reform candidates.... Read More