New report pegs cost of US tort system at 27 times federal spending on homeland security

By CMTA Staff

Capitol Update, March 30, 2007 Share this on FacebookTweet thisEmail this to a friend

America’s out-of-control legal system imposes a staggering economic cost of over $865 billion every year according to a new economic analysis released by the Pacific Research Institute (PRI), a free-market think tank based in San Francisco, California.  This is 27 times more than the federal government spends on homeland security, 30 times what the National Institutes for Health dedicates to finding cures for deadly diseases, and 13 times the amount the Department of Education spends to help educate America’s children. 
 
The authors of Jackpot Justice: The True Cost of America’s Tort System calculated that the nation’s tort system imposes a yearly "tort tax" of $9,827 for a family of four and raises health care spending in the U.S. by $124 billion. 

Other points made by the report include:
• The $865 billion annual cost of America’s tort system is equivalent to the total yearly sales of the entire U.S. restaurant industry.
• More than 51,000 U.S. jobs have been lost due to asbestos-related bankruptcies alone.  Employees at these bankrupted companies have lost $559 million in pension benefits. 
• Lawsuits against American corporations generate an annual loss of $684 billion in shareholder value.  Who are American shareholders? Not just Bill Gates and Warren Buffet. fifty percent of all U.S. shareholders are ordinary individuals.
• If you assume U.S. costs should be in line with other industrialized countries, the authors project that America wastes $589 billion per year on excessive social tort costs, equivalent to the total annual output of Illinois.
• The practice of "defensive medicine" by litigation-fearing physicians increases American health care costs by $124 billion per year.

Read more Energy articles

Capitol updates archive 989898989