Protecting American Consumers Together (PACT), a national advocacy and educational organization, has released a study by The Perryman Group highlighting the financial impact of lawsuit abuse on American families. According to the study, such abuses cost the average family $5,135 annually.
The report indicates that excessive litigation inflates costs for basic necessities, with prescription medications seeing a 9.02% increase, home insurance up by 4.56%, health insurance by 2.71%, auto insurance by 2.50%, and soap/detergent by 2.15%. Overall, consumer prices in the U.S. are estimated to be about 1.32% higher due to these legal practices.
Households in the District of Columbia, California, and New York face the most significant financial burdens from excessive litigation, with losses reaching $19,140 in D.C., $8,306 in California, and $7,914 in New York. Nationwide average household losses stand at $5,135.
The study estimates that lawsuit abuse affects total output by $557.8 billion annually and impacts over 4.81 million jobs when considering multiplier effects. Additionally, annual U.S. earnings losses due to excess torts amount to nearly $354.4 billion or $1,058 per person.
PACT Executive Director Lauren Zelt emphasized the need for reform: "Consumers are unnecessarily strapped by the economic inflation due to lawsuit abuse... Reforming the system is the only way to ensure that plaintiffs can access a legal system that treats them with dignity and respect while protecting consumers’ pocketbooks."
PACT is actively working at both federal and state levels to raise awareness and push for reforms against lawsuit abuse. A recent poll showed that 74% of voters support eliminating this "hidden tax." PACT's efforts include campaigns in Georgia, California, and Texas aimed at legislative changes.
The Perryman Group is led by economist Dr. M. Ray Perryman and specializes in economic and financial analysis.
Information from this article can be found here.