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Latest Tillinghast Report Stirs Debate

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The Wall St. Journal has a nice report on the latest Tillinghast study of the total cost of Tort law in America today.

The study puts the cost of tort at $260 billion, about the same amount as Wal-Mart's annual sales. It includes frictionless transfer payments (you negligently rear-end me, and one day later your car insurance company cuts me a check for my damages), but does not include "the cost to society of a medical student who chooses not to become an obstetrician because malpractice insurance in that field is getting more expensive," or "the loss to society when a company decides not to roll out a new product because its executives are afraid of potential liability claims if something goes wrong." Nor of course are any of tort law's benefits (the compensation to legitimately wronged parties, the appropriate care that might otherwise perhaps not have been taken in certain cases) accounted for -- Tillinghast is very clear that its goal is not to evaluate tort law, just to account for its costs. That, it turns out, is a very difficult thing to do.

Most useful, perhaps, is the direction of the cost figure, not its absolute value. And that direction is steadily, unfailingly, upward.

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Rafael Mangual
Project Manager,
Legal Policy
rmangual@manhattan-institute.org

Katherine Lazarski
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.