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May 16, 2004


Cost of U.S. liability sector in 2002: $233 billion

"The U.S. tort system cost $233 billion in 2002, a $27.4 billion increase over 2001, representing the largest dollar increase in U.S. history. Current costs translate into $809 per U.S. citizen, $87 more than in 2001 and $797 more than in 1950." So say the people at Tillinghast Towers Perrin, who've issued the newest update to their widely followed series of estimates of the size of the liability insurance sector of the U.S. economy. Liabilities tied to asbestos payouts jumped to $11 billion, double the level of just two years earlier, and medical malpractice, class actions and shareholder suits all exerted upward pressure on the totals. Less than 50 cents on the dollar of these costs were returned to claimants, and only 22 cents went to compensate actual economic losses, the report says. "Tort costs increased by a total of 30% in the last two years -- the largest two-year increase since 1986/1987." ("U.S. Tort Costs Climbed to Record $233 Billion in 2002, According to Tillinghast Study", Dec. 10, executive summary (PDF).

[cross-posted from Overlawyered, where it ran Dec. 11, 2003]

Posted by Walter Olson at 07:33 PM | TrackBack (0)



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