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. ILR Unveils the Top 10 Most Ridiculous Lawsuits of 2017

    December 21, 2017 | News

    The U.S. Chamber Institute for Legal Reform released the "Top Ten Most Ridiculous Lawsuits of 2017," an annual list highlighting the most absurd lawsuits of the year. ... Read More

  2. In the News Today - December 11, 2017

    December 11, 2017 | News

    Insurance Commissioners Roll Out Model Cybersecurity Law; New York Plaintiffs' Firm Has Filed At Least 140 Website Accessibility Lawsuits since 2015... Read More

  3. "The Trial Bar's Tax Break"

    December 05, 2017 | News

    The Wall Street Journal Editorial Board urged the House-Senate tax conference committee to reinstate a provision that would strip plaintiffs' attorneys of a "contingency-fee carve-out" on taxes.... Read More

  4. ILR Research Review - Fall 2017

    November 30, 2017 | Research

    This special double-issue of the ILR Research Review features a wealth of insight and analysis on the world's rapidly changing litigation environment. The research contained in this issue targets exploitative litigation at home and abroad, examining numerous developments ranging from hyper-aggressive trial lawyer advertising in the U.S. to the imminent expansion of class actions in Europe.... Read More

  5. In the News Today - November 22, 2017

    November 22, 2017 | News

    New Mexico Judge Dismisses 99 ADA Lawsuits as Fraudulent and Malicious... Read More

  6. Senate Committee Scrutinizes Widespread Abuses of Civil Justice System

    November 08, 2017 | Blogs

    Today, the U.S. Senate Judiciary Committee holds a hearing to examine the impact of lawsuit abuse on America's small businesses and job creators.... Read More

  7. Unstable Foundation:
    Our Broken Class Action System and How to Fix It

    October 24, 2017 | Research

    Unstable Foundation examines the pervasive flaws afflicting the United States' class action system. Class actions rarely provide meaningful compensation for class members, and are poorly suited to deterring wrongful conduct.... Read More

  8. Bad for Your Health:
    Lawsuit Advertising Implications and Solutions

    October 24, 2017 | Research

    This paper documents the proliferation of alarmist, misleading ads soliciting the public to file lawsuits against prescription drug and medical device companies. The report explores how these ads exaggerate product risks, minimize benefits... Read More

  9. A Questionable IARC Report and the 'Lawsuit Inducing' Legacy of California's Prop 65

    June 30, 2017 | News and Blog

    A recent Reuters investigation "uncovered severe intellectual dishonesty" by a researcher for the International Agency for Research on Cancer (IARC) for a report which classified "glyphosate" (often sold under the brand name pesticide "RoundUp") as carcinogenic, writes Dr. Joseph Perrone, Chief Science Officer at the Center for Accountability in Science, in the Orange County Register. ... Read More

  10. The ILR Research Review - Spring 2017

    May 08, 2017 | Research

    This edition of the ILR Research Review offers valuable insights from ILR's recent research on the latest trends in litigation and the tactics and strategies entrepreneurial plaintiffs' firms are using to expand their business models and bring more lawsuits in local, state, federal, and international courts.... Read More