The recent legal decision by a Delaware judge to overturn Elon Musk’s $56 billion compensation package has sparked significant criticism from the legal community. This ruling, which favored a single Tesla shareholder, is part of a broader trend in which the U.S. legal system is being manipulated for financial gain. Josh Hammer, Senior Editor-at-Large for Newsweek, argues that these legal actions, driven by the pursuit of large settlements and high fees, contribute to rising litigation costs, which ultimately affect consumers and businesses.

One notable aspect of this case is the amount that the shareholder’s lawyers could potentially earn in legal fees—up to $345 million, which would be a rate of $18,000 per hour. This figure is seen by many as a symbol of an excessively greedy, inefficient, and unjust legal system, where trial lawyers benefit disproportionately compared to the broader public and their plaintiffs. 

The broader implications of such legal decisions are not limited to just the corporate world. Rising costs associated with lawsuits and settlements—often referred to as “tort costs”—are a major contributor to higher premiums for auto and medical liability insurance. According to the Institute for Legal Reform (ILR), “lawsuits, legal fees, and settlements cost the average American household $4,207 annually. In Georgia, New York, New Jersey, and California, per-household costs surpassed $5,000 in 2022.” In his piece, Hammer argues these hidden costs are embedded in everyday goods and services, and that “Legal-reform efforts aren’t just about one lawsuit, one CEO, or one billionaire. The point is to remedy a broken system that is raising costs on every American and threatening entrepreneurship.”