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. U.S. Chamber Applauds President Bush for Renewed Commitment to Ending Lawsuit Abuse

    December 14, 2004 | Press Release

    WASHINGTON, DC - The U.S. Chamber of Commerce Institute for Legal Reform (ILR) today applauded President George W. Bush, who has made reform of America's civil justice system a centerpiece of this week's White House Economic Summit. ... Read More

  2. New Web Site Adds Muscle to Legal Reform Mission

    October 24, 2004 | Press Release

    WASHINGTON, D.C. - The United States Chamber of Commerce Institute for Legal Reform (ILR), on behalf of the Legal Reform Now Coalition, today launched a new information clearinghouse on the World Wide Web. ... Read More

  3. Chamber Hails House Passage of Lawsuit Abuse Reduction Act

    September 13, 2004 | Press Release

    WASHINGTON, DC - The U.S. Chamber Institute for Legal Reform (ILR) today hailed the passage of H.R. 4571, the Lawsuit Abuse Reduction Act of 2004, by the U.S. House of Representatives."The Lawsuit Abuse Reduction Act will help put an end to the abuses of our civil justice system by unscrupulous trial lawyers," said ILR President Lisa Rickard. "The House has taken an important step toward providing much-needed relief to small business owners and consumers who are footing the bill for America's legal crisis." ... Read More

  4. Chamber Marks House 'Tort Reform Week' by Urging Swift Passage of the Lawsuit Abuse Reduction Act

    September 12, 2004 | Press Release

    WASHINGTON, DC - The U.S. Chamber Institute for Legal Reform (ILR) today marked the start of "Tort Reform Week" in the U.S. House of Representatives by renewing its call for the House to quickly pass H.R. 4571, the Lawsuit Abuse Reduction Act of 2004. "Frivolous lawsuits are hitting hard-working Americans where it hurts most - in their pocketbooks," said ILR President Lisa Rickard. "Lawsuit abuse threatens jobs and raises prices for all consumers. I urge Congress to boost our economy and protect American jobs by taking swift action to pass the Lawsuit Abuse Reduction Act."... Read More

  5. U.S. Chamber Enters Political Debate for Next White House

    August 23, 2004 | Press Release

    WASHINGTON, D.C. - The United States Chamber of Commerce announced it would participate in two new political initiatives to educate voters about the devastating impact of a runaway legal system on the American way of life during this fall's presidential campaign.... Read More

  6. Chamber Targets Daschle in Statewide Voter Education Campaign

    August 18, 2004 | Press Release

    WASHINGTON, - D.C. The U.S. Chamber of Commerce today launched a South Dakota statewide education campaign designed to inform voters about Senate Minority Leader Tom Daschle s national political agenda in Washington an agenda that is vastly different from the needs of the state. ... Read More

  7. U.S. Chamber Calls Global Warming Lawsuit an End-Run Around Congress and Regulatory Agencies

    July 20, 2004 | Press Release

    WASHINGTON, D.C. - The United States Chamber of Commerce condemned a complaint filed today in federal district court by several state attorneys general and the New York City Office of Corporation Counsel and called the action an attempt to circumvent Congress and federal and state regulatory agencies in setting U.S. policy. ... Read More

  8. Chamber Urges House to Pass Lawsuit Abuse Reduction Act of 2004

    June 21, 2004 | Press Release

    WASHINGTON, DC -- In written testimony, the U.S. Chamber Institute for Legal Reform today urged the U.S. House of Representatives to quickly pass H.R. 4571, the Lawsuit Abuse Reduction Act of 2004. The legislation would help curb frivolous litigation by strengthening the enforcement provisions of Rule 11 of the Federal Rules of Civil Procedures. The bill also contains important additions to Rule 11 that would reduce forum shopping by plaintiff s attorneys. The key provisions of the Lawsuit Abuse Reduction Act would: ... Read More

  9. Chamber: Small Businesses Victimized by America's Legal Crisis

    June 07, 2004 | Press Release

    WASHINGTON, D.C. - The United States Chamber of Commerce Institute for Legal Reform (ILR) today released a study showing the tort system costs U.S. small businesses $88 billion a year. ... Read More

  10. Chamber Steps Up Fight Against Excessive Punitive Damages

    April 27, 2004 | Press Release

    WASHINGTON, D.C. - The United States Chamber of Commerce Institute for Legal Reform (ILR) today hosted a strategy forum with America's top legal experts on new strategies to curb excessive punitive damage awards that threaten the vitality of U.S. businesses. "The huge amount of money pocketed by unscrupulous trial lawyers is destroying businesses, raising consumers' costs, and threatening the jobs of thousands of workers," said Lisa Rickard, president of ILR. "Last year's success calls for more work to solidify our victory, or we risk being undone by half-measures and misguided rulings." ... Read More