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March 14, 2006

Disputed Report on Rising Tort Costs

Tillinghast, an insurance industry consulting firm, has released a new report |PDF|which calculates the total cost of the U.S. tort system at $260 billion - nearly $900 for every person in the nation - according to a story in the Wall Street Journal (subscription required).  The Bush Administration has cited Tillinghast's figures in the past as evidence that the "the U.S. tort system is the most expensive in the world" creating "deadweight losses" to the national economy.  However, the figures are vigorously disputed by others who say that the calculations are deeply flawed and heavily inflated.  Critics note for example that in 1985 the Rand Corporation's Institute for Civil Justice estimated that tort costs for that year were between $29 billion and $36 billion.  For that same year, Tillinghast's figure was $83.7 billion.   Others point out that cost alone is not a justification for law reform nor are these cost estimates weighed against a calculation of the social and economic value of deterring negligent behavior.


March 14, 2006 | Permalink


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