Cost of Abuse
Lawsuit abuse costs everyone. When our civil justice system is abused, we all pay and we all lose. Personal injury lawyers who game our courts hoping to strike it rich by filing frivolous claims cost taxpayers, small business owners, patients and schools money. Consider the following facts.
Cost to Consumers
- The U.S. tort system costs every man, woman and child in the U.S. a yearly a "tort tax" of $838-that's $3,352 for a family of four!
-Tillinghast-Towers Perrin. 2009 Update on U.S. Tort Cost Trends - American tort litigation is costing the nation 1.79% of gross domestic product annually.
-Tillinghast-Towers Perrin. 2009 Update on U.S. Tort Cost Trends - Seventy-nine percent of Americans believe personal injury lawyer advertising encourages people to sue even if they haven't been injured.
-Sick of Lawsuits National Survey, Conducted by Public Opinion Strategies, August 16-18, 2005
Cost to Small Businesses
- The tort liability price tag for small businesses in America in 2008 was $105.4 billion.
- U.S. Chamber Institute for Legal Reform, Tort Liability Costs for Small Businesses 2010. - Small businesses bore 81% of business tort liability costs but took in only 22% of revenue in 2008.
- U.S. Chamber Institute for Legal Reform, Tort Liability Costs for Small Businesses 2010. - Small businesses paid $35.6 billion of their tort costs out of pocket as opposed to through insurance in 2008.
- U.S. Chamber Institute for Legal Reform, Tort Liability Costs for Small Businesses 2010. - Medical malpractice costs for doctors in small groups and small medical labs total $28 billion. This is 94% of the total costs of medical malpractice ($29.8 billion).
- U.S. Chamber Institute for Legal Reform, Tort Liability Costs for Small Businesses 2010. - When medical malpractice costs are added to all other tort liability costs for small businesses, the total is $133.4 billion and 83% of total tort costs for all businesses ($160.5 billion).
- U.S. Chamber Institute for Legal Reform, Tort Liability Costs for Small Businesses 2010. - Small businesses typically spend about $5,000 to settle a legal dispute-about 10 percent of a small business owner's average salary.
-"Use of Lawyers" National Federation of Independent Business National Small Business Poll, Vol. 5, Issue 2, 2005 - In a recent survey from the National Federation of Independent Business (NFIB), liability costs rank second only to healthcare costs as problems facing small businesses. Four years ago, liability costs ranked No. 13 on their problem list. The U.S. Chamber of Commerce estimates that U.S. small businesses spend $88 billion per year on litigation costs.
-Houston Business Journal, December 18, 2006 - If your business is sued, the stakes can increase dramatically and take tens of thousands of dollars and years to resolve. Two-thirds of Maryland small businesses fear they will be sued according to a MDCALA study. Resources that small business owners and managers would normally put towards expanding business and creating jobs are being held back to cover the cost of possible lawsuits.
Cost to Our Children
- Fear of litigation has schools from Massachusetts to California banning children from playing games like tag at school recess. "No running" signs have even been posted at school playgrounds in Broward County, Florida.
-Columbus Dispatch, January 24, 2007 - A MDCALA survey of Maryland public school principals found that 45% spend 5-15 hours each week dealing with litigation-related issues. In addition, 30% of the principals say that volunteerism has decreased because of the threat of lawsuits.
Cost to Our Health Care System
Lost Health Care Professionals and Services
- Maryland is only one state facing a loss of medical professionals. Increases in the number of medical malpractice suits and the size of jury awards are forcing physicians across the country to retire early, relocate or give up performing high-risk medical procedures. According the American Medical Association (AMA), there are now 17 states experiencing a full-blown medical liability crisis. The AMA lists Maryland as a state "seeing warning signs."
-America's Medical Liability Crisis: A National View, AMA website, December 20, 2006 - A survey by the University of South Florida's College of Medicine found malpractice concerns may deter medical students from pursuing careers in obstetrics and gynecology.
-United Press International, August 29, 2006
Increased Cost of Health Care
- PricewaterhouseCoopers calculates that medical liability concerns increase annual health care spending by $124 billion in 2006 dollars. The additional cost of liability-based health care costs adds 3.4 million Americans to the rolls of the uninsured.
-"Jackpot Justice: The True Cost of America's Tort System," Pacific Research Institute, March 27, 2007 - Ten percent of every dollar spent on health care is attributed to the costs of liability and defensive medicine.
- PriceWaterhouseCoopers, January 2006 - About 40 percent of medical malpractice lawsuits are groundless-meaning there is no evidence that a medical error was committed or that the patient suffered any injury.
- Harvard School of Public Health, May 2006 - Nearly 9 out of 10 physician specialists believe there is a problem with medical expert witnesses providing testimony on issues beyond their specialties.
- SOL and American Tort Reform Association National Survey, May 2007
