TORT COSTS ROSE IN 2001

The U.S. tort system cost $205 billion in 2001, or $721 per U.S. citizen, representing a 14.3 percent increase in tort costs since the year 2000, according to a study by Tillinghast- Towers Perin (Tillinghast) in “U.S. Tort Costs: 2002 Update.” At current levels, U.S. tort costs are equivalent to a 5 percent tax on wages. Among other things, the study revealed that: The U.S. tort system is a highly inefficient method of compensating injured parties, returning less than 50 cents on the dollar to people it is designed to help and returning only 22 cents to compensate for actual economic loss; As of 2001, U.S. tort costs accounted for slightly more than 2 percent of GDP, ending a 13-year decline in the ratio of tort costs to GDP; Medical malpractice costs have risen an average of 11.6 percent a year since 1975 in contrast to an average annual increase of 9.4 percent for overall tort costs; The largest single factor in the rise of tort costs in 2001 was a significant reassessment of liabilities tied to asbestos claims. For copies of the report, email: robyn.hennessy@tillinghast. com.

Topics USA