Did You Know?

 

Lawsuit abuse affects virtually everyone, no matter how selfless their work or how important their mission. Victims include the Girl Scouts and the Little League.

Girl Scouts
Girl Scouts in the metro Detroit area must sell 36,000 boxes of Girl Scout cookies each year just to pay for liability insurance.
-The Detroit Free Press, December 4, 1997.

Little League
The Little League has seen its insurance premiums skyrocket 1,000 percent in a recent five-year period. They spend more on insurance than on any other item in their budget.
-
Little League Baseball Inc. CEO Creighton Hale in The Wall Street Journal.

Jobs are being lost
The chilling effect of lawsuits on our nation's economy has been documented in a study for the National Bureau of Economic Research. This study catalogued every state that had reformed its civil liability laws and compared the before and after effects on economic performance. The results were dramatic: States that reduced liability substantially increased productivity and employment. Conversely, states that expanded liability decreased productivity and job creation.

- "The Causes and Effects of Liability Reform: Some Empirical Evidence," by Thomas J. Campbell, Daniel Kessler, George Shepherd. National Bureau of Economic Research, Inc., January, 1995.

Innovation lost
Innovative products and needed services are being lost or jeopardized because of lawsuit abuse. The litigation craze has shot straight at the heart of what until now has been America's strong suit -- innovation -- keeping potentially life-saving and life-enhancing products off the market.

Life-saving medical devices
Each year, more than 7.5 million lives in this country are either saved by implantable medical devices -- like pacemakers for heart patients or shunts for hydrocephalus -- or improved through products like replacement eye lenses for cataracts and balloon angioplasty devices. Unfortunately, a recent study reveals that at least 75 percent of suppliers of biomaterials used to make medical implants have banned sales to U.S. implant manufacturers. In deciding to sell or not to sell to the implant market, risk of legal liability was a key factor for 100 percent of suppliers.

- Study by New York-based Aronoff Associates for HIMA entitled "Biomaterials Availability: a Vital Health Care Industry Hangs in the Balance."

Safety improvements
A report by the Brookings Institute found that product liability lawsuits discourage the incorporation of safety improvements.
- "The Negative Impact of Product Liability on U.S. Competitiveness: Liability Law Reform Reinforced by New Studies," Kirkland & Ellis, October 1990.

New products
Forty-seven percent of companies hold back development projects over concern about product liability. 

- "The Negative Impact of Product Liability on U.S. Competitiveness: Liability Law Reform Reinforced by New Studies," Kirkland & Ellis, October 1990.

AIDS research
Science magazine reports that two biotech firms have halted or delayed research on AIDS vaccines because of liability fears.
-
Americans for Lawsuit Reform.

The estimated direct cost to Americans of our civil justice system is $152 billion.
-
Tort Cost Trends: An International Perspective, R.W. Sturgis, published by Tillinghast, Towers Perrin, 1995.

That is 60% of the amount that is spent on K-12 public education. It is 2 1/2 times the amount spent on police and fire protection.
-
Tort Cost Trends: An International Perspective, R.W. Sturgis, published by Tillinghast, Nelson & Warren, Inc., 1992.

The "lawsuit tax" is estimated to cost every Michigan citizen about $1,200 per year. We all pay the "lawsuit tax," calculated to be $1,200 for every man, woman and child in Michigan and every other state. The tax is collected through litigation.

Methodology
$300 billion (combining the direct cost of the civil justice system with the cost of lost jobs, higher consumer prices and other factors) divided by 248.7 million total U.S. population (1990) census.

Source for legal costs: The Legal Revolution and its Consequences, Peter Huber, 1988.

The "lawsuit tax" represents as much as thirty percent of the cost of a stepladder, over ninety-five percent of the cost of childhood vaccines, one-third the cost of a small airplane, and actually exceeds the cost of making a football helmet.
- America's Civil Justice Dilemma: The Prospects For Reform by former United States Attorney General Richard Thornburgh, published in the Maryland Law Review, 1996, Number 4.

Because of lawsuits, we are less competitive with other countries. The "lawsuit tax" is a handicap we impose on ourselves, and it puts American job providers at a huge disadvantage against our international competitors.

There are 70,000 product liability lawsuits pending in the United States annually, compared to only 200 in the United Kingdom. 
- "The Negative Impact of Product Liability on U.S. Competitiveness: Liability Law Reform Reinforced by New Studies," Kirkland & Ellis, October 1990.

The United States has 30 times more lawsuits per person than Japan.
- America's Legal Mess, U.S. News and World Report, August 19, 1991.

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