The Perryman Group Study Estimates California Families Lose $8,306 Annually to Excessive Litigation; LA City Administrator has Warned City Services at Risk as Lawsuit Costs Escalate
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 showing lawsuit abuse costs the average California family $8,306 per year – the highest state in the nation.
As a result of excessive litigation, California residents face reduced earnings, inflated costs for basic necessities, and universally higher consumer prices. The Perryman Group Study, which can be read here, found California families suffer an average annual loss of $4,430 in earnings, nearly double the national household loss of $2,698. In addition, lawsuit abuse inflates essential costs by an additional $3,876 per California household, including:
- Prescription medications: +10.509%
- Home Insurance: +5.312%
- Health Insurance: +3.163%
- Auto Insurance: +2.910%
- Soap/Detergent: +2.510%
The study further found excessive litigation and lawsuit abuse raises overall consumer prices nationwide by about 1.32%
California’s lawsuit abuse crisis has also had a severe impact on city budgets, particularly in Los Angeles. LA City Administrator Matthew Szabo stated last month that “every dollar that goes towards a liability payout due to a lawsuit is reducing a city service.” According to the LAist, Los Angeles is currently on track to pay out at least $320 million this fiscal year in settlements – far exceeding the city’s $87 million budget.
When factoring in both costs from inflation and reduced earnings as a result of excessive litigation, the average California household loses $8,306 per year, while the average American family sees losses totalling $5,135.
“California 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.”
In addition to this new California campaign, 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 last month found that 70% of voters believe that lawsuit abuse is a major contributor to higher prices. PACT has also launched seven-figure campaigns in California and other states to raise awareness about this national problem and push for reforms to end lawsuit abuse.
From the Perryman Group Study:
Note: The full study can be read here.
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.