The Perryman Group Study Estimates Lawsuit Abuse Costs the Average American Family $5,135 Per Year
Washington, D.C. – Protecting American Consumers Together (PACT), a 501(c)(4) national advocacy and educational organization, today released a study from The Perryman Group that shows lawsuit abuse costs the average American family $5,135 per year.
As a result of lawsuit abuse, Americans earn less money, basic necessities cost more, and consumer prices are universally higher across the board. The full study can be read here.
The Perryman Group Study found that excessive litigation inflates the cost of basic necessities in America, resulting in significant price increases, such as:
- Prescription medications: +9.02%
- Home Insurance: +4.56%
- Health Insurance: +2.71%
- Auto Insurance: +2.50%
- Soap/Detergent: +2.15%
The study found that all consumer prices in the United States are estimated to be about 1.32% higher than they would be without excessive litigation.
Excessive litigation imposes significant financial burdens on households across the country, with residents in the District of Columbia, California, and New York experiencing the greatest losses. When factoring in both costs from inflation and reduced earnings as a result of excessive litigation, the average household losses are:
- District of Columbia: -$19,140
- California: -$8,306
- New York: -$7,914
- Washington: -$7,795
- Massachusetts: -$7,761
- Nationwide Average: -$5,135
The study estimates that lawsuit abuse overall effects total $557.8 billion in output (gross product) each year and more than 4.81 million jobs including multiplier effects. Consumers bear a significant portion of the burden of excessive lawsuit abuse costs.
Reducing resources available for productive activity also negatively affects economic growth and, therefore, earnings. The Perryman Group estimates that annual US earnings losses due to excess torts total almost $354.4 billion, which is $1,058 per person ($2,698 per household).
Consumers bear a substantial portion of excess tort costs. Households also deal with other issues associated with an unbalanced civil justice system such as reduced numbers of healthcare providers and slower product innovation. Lawsuit abuse reform could significantly reduce or eliminate these costs, with notable benefits for consumers.
“Consumers are unnecessarily strapped by the economic inflation due to lawsuit abuse, and the only way to undo this hidden tax is to pass meaningful lawsuit abuse reform at the state and federal level,” said PACT Executive Director Lauren Zelt. “Reforming the system is the only way to ensure that plaintiffs can access a legal system that treats them with the dignity and respect they deserve while protecting consumers’ pocketbooks.”
PACT is engaged in efforts at the federal level to drive awareness and reform around the personal injury system. A national poll conducted by PACT this spring found that 74% of voters believe that Congress and the Trump Administration should eliminate the hidden tax brought by lawsuit abuse. PACT has also focused its state-level efforts on Georgia, where it undertook a seven-figure ad campaign aimed at supporting Governor Kemp’s legislation to lower costs for families, which was signed into law this week. PACT has also launched seven-figure campaigns in California and Texas to raise awareness and push for reforms to end lawsuit abuse.
The Perryman Group is an economic and financial analysis firm led by noted economist Dr. M. Ray Perryman and a veteran team of highly talented professionals. To learn more about The Perryman Group, click here.
About Us:
Protecting American Consumers Together (PACT) is a 501(c)(4) national advocacy and educational organization dedicated to standing up for plaintiffs, victims, and consumers to ensure they can access a fair and transparent legal process. Consumers deserve to be protected from exploitative practices by a predatory personal injury system. Through educational efforts, PACT will seek to inform the public and advocate for a consumer protection platform that ensures a balanced, just, and trustworthy legal system—giving everyone confidence that their rights and well-being are upheld.
Mission Statement:
No one deserves to be victimized by personal injury attorneys who exploit loopholes in an unregulated system that drives up costs for everyone. We’re committed to a legal system that protects—not exploits—because consumers deserve a justice system they can trust. Our mission is to protect consumers, strengthen and improve the legal system, and ensure that the public is empowered.
For more information on PACT’s efforts, initiatives, and board members, visit our website and follow PACT on X, Instagram, YouTube, LinkedIn, and Facebook.