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Pacific Research Institute: Cost of American jackpot justice: $865 billion



I've long complained that the Tillinghast/Towers Perrin estimate of the cost of the tort system is a fundamental underestimate because of its lack of measurement of second-order effects.

I haven't had a chance to analyze the PRI report in detail, but their figure of $865 billion/year (6.6% of the GNP), which includes the effect of the tort system on safety, employment, innovation, rent-seeking, and rent-avoidance, is around the right order of magnitude, though it's a little much to expect three-digit accuracy from the estimates the study makes. (Cross-posted at Overlawyered.)

 

 


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.