Lauren Zelt, executive director of Protecting American Consumers Together (PACT), said in a press release that meaningful lawsuit abuse reform is necessary to alleviate the financial burden on California consumers.
"California consumers are unnecessarily strapped by the economic inflation due to lawsuit abuse," said Zelt. "Reforming the system is the only way to ensure that plaintiffs can access a legal system that treats them with the dignity and respect they deserve while protecting consumers' pocketbooks."
A Perryman Group analysis for PACT estimates the annual cost of excessive litigation in California at $8,306 per household, which is the highest in the nation. This cost erodes wages by $4,430 and adds $3,876 in mark-ups on essentials such as prescriptions and insurance. Nationally, the study indicates that lawsuit abuse increases consumer prices by 1.32 percent, approximately $5,135 per family. A recent PACT poll reveals that 70 percent of voters perceive this legal burden as a significant factor driving higher costs. Los Angeles exemplifies this pressure, with liability payouts expected to reach at least $320 million this fiscal year—nearly four times the budgeted $87 million—prompting warnings from the city administrator that each settlement dollar detracts from essential services.
According to the Institute for Legal Reform, U.S. tort costs amounted to $443 billion in 2020, representing 2.1% of GDP. Of this amount, $229 billion was attributed to general and commercial liabilities, $196.5 billion to auto accidents, and $17.5 billion to medical liability claims. These figures only account for insurable costs; thus, total tort costs may be even higher and have grown at an average rate of 6% annually from 2016 to 2020. The study highlights the importance of evaluating how legislative reforms could enhance the efficiency and economic impact of the tort system across states.
Zelt has over 15 years of experience in public affairs and previously founded Zelt Communications, which specializes in strategic communications and public relations.