The Perryman Group has released a report indicating that excess tort costs lead to an estimated annual loss of $5.13 billion for Nevada consumers.
According to the study, these excessive tort costs equate to $1,607 per person and $4,191 per household in Nevada through increased prices and reduced earnings. These costs are particularly evident in essential services and products. Prescription prices rise by 8.154%, home insurance by 4.122%, and health insurance by 2.454%. Everyday goods such as groceries, soap, and restaurant meals also experience price increases, with overall consumer prices across all categories rising an average of 1.193% due to the inflated costs of the U.S. tort system.
The U.S. Chamber Institute for Legal Reform reports that tort costs in America totaled $443 billion in 2020, accounting for 2.1% of the U.S. Gross Domestic Product (GDP). These costs encompass general and commercial liabilities, automobile accident claims, and medical liability claims. The study highlights the substantial economic impact of the tort system on both businesses and individuals nationwide.
An ILR study reveals that only 53 cents of every dollar spent in the tort system goes to plaintiffs, with the remaining 47 cents consumed by litigation costs and other expenses. This inefficiency suggests that nearly half of the resources allocated to the tort system do not directly benefit those seeking compensation. The report implies that this imbalance contributes to the overall economic strain caused by excessive litigation.
The Perryman Group is a Texas-based firm specializing in economic and financial analysis, focusing on impact assessments, forecasting, and policy evaluation across various industries. With decades of expertise, it provides comprehensive economic research for a diverse clientele including large corporations and government entities.