'TORT TAX' COSTS ILLINOIS JOBS, ECONOMIC GROWTH
February 22, 2006
In late 2005, the American Tort Reform Association (ATRA) released its annual "Judicial Hellholes" report to spotlight what ATRA considers to be the worst jurisdictions for defendants seeking a fair trial in civil lawsuits. Three were in Illinois.
According to Sean Parnell, vice president of the Heartland Institute, this fact alone highlights what many consider to be a major problem in Illinois: an unfriendly legal climate that imposes costs on business owners and consumers, ultimately harming job growth and investment in the state. Consider:
- A report released by Towers Perrin Tillinghast (TPT) assessing tort costs in the United States found the total cost of litigation was $246 billion in 2003, approximately $845 per person; TPT forecasts tort costs in 2006 will rise to $1,000 per person.
- This cost, often referred to as the "tort tax," is passed on to consumers and taxpayers; experts say because of Illinois' legal climate, the tort tax for each resident is probably higher than the national average.
- Many people are concerned about the impact the tort tax has had on the Illinois economy and sluggish job growth; they say friendlier legal climates in nearby states put Illinois at a competitive disadvantage.
Maureen Martin, senior fellow for legal affairs at the Heartland Institute, points out that Illinois has made significant improvements in its legal climate but asserts that more reform is needed if Illinois is to fully shed its image as a judicial hellhole.
Source: Sean Parnell, "Tort Tax Costs Illinois Jobs, Economic Growth," Heartland Institute, February 1, 2006.
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