MALVERN, PA — A new consumer guide from the Insurance Information Institute (Triple-I) and Munich Reinsurance America, Inc. (Munich Re US) sheds light on how legal system abuse is driving up costs for consumers and businesses across the United States. The report, A Consumer Guide: How Legal System Abuse Impacts You, details the financial burden caused by litigation tactics, including aggressive attorney advertising, third-party litigation financing, and persuasive jury anchoring strategies.
The guide reveals that the economic impact of excessive litigation is substantial, with U.S. small businesses bearing over $160 billion in annual tort costs. For the average family of four, this translates to an added $6,664 in yearly expenses. Additionally, these practices have contributed to the loss of 4.8 million jobs in the economy.
“Legal system abuse has driven up litigation expenses and costs, impacting businesses and consumers across the United States,” said Joshua Hackett, Head of Casualty at Munich Re US. “If left unchecked, these rising costs will continue to increase insurance premiums and limit coverage options.”
The report also highlights the often-overlooked reality that plaintiffs may not derive the full benefit from large settlements. Legal fees, third-party investor claims, and additional costs like medical expenses and case-related fees frequently reduce the actual amount plaintiffs receive, sometimes leaving them with significantly less than expected.
Sean Kevelighan, CEO of Triple-I, emphasized the broader implications of unchecked litigation. “While billboard attorneys use exploitative advertisements promising big dollar settlements, the truth is consumers and business owners can be left with less money, sometimes substantially less when third-party litigation financiers are involved,” he said. “The big business of U.S. law is increasing costs for everyone, which is why it’s vital Americans understand what’s happening and push for legal reform.”
The guide calls for greater transparency in third-party litigation financing, efforts to address inflated medical billing practices, and more responsible legal advertising. It also urges consumers to educate themselves about the impact of legal system abuse and advocate for reforms that reduce unnecessary costs and improve outcomes for both plaintiffs and the broader economy.
The findings underline the importance of tackling these issues to prevent further economic harm and to ensure fair, efficient legal processes that benefit all stakeholders.
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