Personal injury lawsuits cost all of us monetarily, not just the defendant - or that's what many businesses and the insurance industry would like us to believe.
The "Tort Tax"
The cost of tort lawsuits - cases for professional negligence, premises liability or motor vehicle accidents - is said to be passed along to consumers by way of higher insurance premiums or higher product costs, like expensive health care. So, while the company (or its insurer) initially pays the litigation costs and jury awards, these costs are recouped by passing the costs onto those that purchase the product or service.
Reports by Towers Perrin and Pacific Research Institute (PRI) purport to show the costs of tort litigation every year. The PRI's 2007 study reports that a family of four pays an annual tort tax of nearly $9,827. The same PRI report puts the total economic cost of the legal system at more than $865 billion yearly. These numbers are staggering.
Is it "Junk Science"?
These staggering tort tax costs may not add up, however.
The reports, specifically the Towers Perrin report, have been widely disputed, discredited and dispelled. The nonprofit, nonpartisan think tank Economic Policy Institute called the Towers Perrin report "exaggerated" and "one-sided."
An article by the American Association for Justice reports that many legal scholars, including Judge Richard Posner of the United States Court of Appeals for the Seventh Circuit, have criticized the Towers Perrin Report. The same article reports that Towers Perrin has taken money from associations that seek to undermine the American tort system, including insurance industry and other tort reform groups.
The ultimate goal of these groups may be to limit access to the legal system by those that are injured under the guise of "tort reform" by bringing to light a problem that doesn't exist. In reality, cases brought on behalf of injured people usually have sufficient merit - if not, the case would be defeated by summary judgment. Also, personal injury cases are expensive and time consuming, and because personal injury attorneys work on a contingency fee basis, if the case doesn't "win" or recover compensation, the attorney isn't compensated for his or her time and effort.
While it is inevitable that some of the litigation costs associated with tort lawsuits will be passed along, it is difficult to imagine that these costs are anything near what the exaggerated reports screaming for tort reform claim.
If you have been injured as a result of someone else's negligence - be it a medical malpractice claim, a defective product, or a car accident, speak with an experienced personal injury lawyer to discuss the possibility of seeking compensation for medical bills, pain and suffering, and lost income.
