NCPA - National Center for Policy Analysis


September 30, 2004

Tort litigation has been a costly burden on the economy and the windfall rewards have gone disproportionately to lawyers rather than plaintiffs, says Stuart Taylor Jr. (National Journal).

For example, asbestos-related litigation to compensate legitimately injured workers has evolved into a dubious revenue stream for trial lawyers, says Taylor.

  • About 90 percent of all claims currently being generated come from individuals recruited by trial lawyers rather than claimants actively seeking compensation.
  • More than 80 percent of claimants have no discernable asbestos-related illness or impairment.

Aside from indirect costs such as "defensive medicine" tests and the thousands of jobs lost through tort-induced bankruptcies, the trial lawyers get the bulk of the rewards, says Taylor:

  • Approximately 33 percent of the more than $230 billion in annual costs goes to the plaintiffs' lawyers and legal defense.
  • About 22 percent of it goes to compensate alleged victims' economic losses, with another 24 percent going towards non-economic losses such as pain and suffering.
  • The remainder, roughly 21 percent, goes to tort insurance overhead costs.

According to the best estimates, about 80 percent of medical-malpractice claimants are not victims of malpractice and over 90 percent of actual victims receive no compensation, notes Taylor.

Source: Stuart Taylor Jr., "Edwards and the Problem with the Trial-Lawyer Lobby," National Journal, Number 28, July 10, 2004.

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