New U.S. Chamber Study: Lawsuit System Costs Reach Over $4,200 Per Household

Costs Paid in the U.S. Tort System Reach a Record High of $529 Billion

WASHINGTON, D.C. - A new economic study released today by the U.S. Chamber of Commerce Institute for Legal Reform (ILR) found that the costs and compensation paid into the U.S. tort system reached over $529 billion in 2022, which is over $4,200 per U.S. household. The study also found that tort costs continue to grow faster than inflation, at an average annual rate of 7.1 percent between 2016 and 2022.

Tort Costs in America: An Empirical Analysis of Costs and Compensation of the U.S. Tort System also estimates every state's per-household tort costs.

Some of the states with the highest per-household tort costs include:

• California ($5,429)
• Georgia ($5,050)
• Texas ($4,594)
• Illinois ($4,281)

While the study shows the challenges of rising tort costs, it also shows that meaningful reforms to improve state legal climates can reduce those costs. Lawmakers in West Virginia have successfully prioritized efforts to create and maintain a fair legal system. Since 2016, West Virginia's tort costs have declined over 20 percent, and its per-household cost was the lowest in the country in 2022, at about $2,100.

"The U.S. tort system is in desperate need of strategic reforms that promote economic growth and lower costs for American households. Plaintiffs' lawyers and litigation funders are getting bigger paydays at the expense of consumers and businesses. The higher the price tag, the more consumers pay for products and services, and businesses see an increase in their liability burden," said U.S. Chamber of Commerce Institute for Legal Reform President Stephen Waguespack. "Lawmakers in states with high tort costs should look at the types of reforms states like West Virginia enacted to bring down their tort costs, such as reining in misleading lawsuit advertising tactics and enacting caps on damages."

Along with the economic study, the Chamber also released a new 50-state data center that breaks down the hidden costs of lawsuits per household.

Tort Costs in America was conducted by The Brattle Group on behalf of ILR and can be downloaded and viewed here.