The U.S. still leads the world in tort costs--the area of law covering personal and property injury suits, including malpractice, product liability, and auto accident cases--but its lead is no longer widening. According to a new study by Tillinghast-Towers Perrin, a management consulting firm, U.S. tort costs have been slowing appreciably.
Such costs (legal and administrative, as well as jury awards and settlements) run about 2.2% of America's gross domestic product, reports the firm. That compares with 1.3% in Italy and Germany; 0.8% in Britain, France, and Canada; and 0.5% in Japan. While most nations' costs have been relatively stable, U.S. costs grew about 50% faster than the economy from 1950 to 1985, bringing the tab to 2.5% of gdp in that year.
The big surprise is the more recent slowdown in tort costs, which apparently reflects a lessening propensity to sue, since it coincides with a leveling off in the number of claims filed since 1985. With tort reform laws passed in almost every state over the past decade, the firm speculates that growing corporate and public resistance to rising tort costs may be deterring potential litigants.