The Pinpoint Policy Institute, a think tank focused on economic reform, has raised alarms over the growing burden of excessive litigation in the U.S. In a recent piece, the institute argues that urgent legal reform is needed to address the rising tort costs, which have become a hidden “tort tax” driving up prices for consumers and businesses alike. In 2022, tort costs amounted to around $529 billion, or 2.1% of the U.S. GDP, according to the U.S. Chamber of Commerce’s Institute for Legal Reform. These escalating costs inflate the price of goods and services, as well as insurance premiums, ultimately impacting everyday Americans.

A recent court ruling in a Tesla case brought this issue into particular focus when plaintiff attorneys were awarded $345 million in legal fees, far less than the $7.7 billion they initially sought. This is part of a broader trend where lawsuits have become increasingly profitable for lawyers, often at the expense of businesses and consumers. As legal costs continue to rise, businesses are forced to divert resources from innovation and growth to legal defense, stifling new ideas and reducing competition in the market.

To address these challenges, Pinpoint Policy Institute called for the incoming Trump administration to create another Department Of Government Efficiency (DOGE)-like effort that focuses on legal reform. A department focused on streamlining legal processes, curbing frivolous lawsuits, and reducing litigation-related costs could help lower insurance premiums and prices across the board. By creating a more efficient legal system, the federal government could reduce the financial strain on consumers, encourage business innovation, and ultimately foster a more competitive and dynamic economy.