Tillinghast Study: U.S. Tort Costs Reach a Record $260 Billion

March 13, 2006

  • March 13, 2006 at 7:48 am
    LL says:
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    Any way you look at it, lawyers are raking it in.

  • March 13, 2006 at 8:28 am
    Linda Fermoyle Rice says:
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    Easy money being what?

    Is it easier money than the medical profession is \”raking in\”? In 2003, spending for health care reached $1.7 trillion or 15.3% of GDP. Out of pocket costs to patients reached $230 billion in 2003.

    Is it easier money than the drug companies are \”raking in?\” In 2003, drug spending rose 11% to $180 billion.

    Is it easier money than the insurance industry is raking in? Property and casualty insurance income increased 320% from the first three quarters in 2002 to the first three quarters in 2003, to at total of $320 billion.

    This doesn\’t look like such \”easy\” money from the point of view of the people lawyers represent. Most people would prefer the company of a loved one who has died because of the negligence of a doctor or driver than a lot of money.

    Most people would rather be healthy and active than crippled and in pain with a good lawsuit.

    Most lawyers handle cases on behalf of people who could not afford to pay a lawyer and, therefore, could not litigate their claim against a negligent person or company. The lawyers don\’t get paid unless and until the client recovers money by way of settlement, verdict or arbitration award.

    The insurance companies pay their lawyers by the hour and seem to encourage their attorneys to make cases as expensive and, thus, as risky as possible for the plaintiff and her attorney. Now, there\’s easy money.

    Most plaintiffs\’ lawyers pay all of the costs of the litigation and lose that money unless the client is successful against the negligent tortfeasor. Litigation involves paying experts, court reporters, copy services, jury fees, and a whole host of other costs.

    Easy money? I don\’t think so, LL.

  • March 13, 2006 at 1:40 am
    tony mauhar says:
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    Please identify the source of the data identifying the \”$260 Billion costs\”.

    Does the figure represent all tort court judgments and the cost of all premiums for all lines of related insurance? If so, were sums deducted for premium payments where no claims were paid?

    Does the figure include settled case ammounts? Most settlement sums are unknown and have confidentiality clauses usually at the insistence of the insurer.To what extent were these figures included in thie $260 Billion\” cost? And how would one verify the accuracy of such statements that are based on non-disclosable private information?

    It is unclear whether the article\’s claim of $260 Billion in tort costs\” is accurate.

  • March 13, 2006 at 6:04 am
    Linda Fermoyle Rice says:
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    It sounds as though the \”losses\” include \”reserves\” (amounts expected to be paid to third parties), which may never be paid to anyone. If so, these figures are misleading.

    It would be interesting to know how insurance company profits have fared over the same periods of time.

  • March 14, 2006 at 6:35 am
    Lawyer who cares says:
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    The author of this incomplete report of tort costs does it\’s readers a disservice by not accurately and completely reporting the facts of its study. It appears to be yet another misguided half truth the insurance/business lobby has attempted to pass off as legitimate stats in support of tort deform movement.

    If your goal was to misinform, mislead or
    distort the truth then you have succeeded. However, in the end you will have more credibility among your target audience as well as those who oppose your interests if you just reported accurately and completely.

    For example that soon to be former Senator from Pa.- Rick Santorum shows us why its important to have credibility, and truthfulness in dealing with the public. Leading up to the most recent election he was banging the med mal reform drum so hard and loud that he didn\’t hear his wife tell him \”Honey did you forget that I\’m suing for malpractice and for a sum in excess of the caps GWB is trying to jam down everybody\’s throats\”. BTW she subsequently got a verdict in excess of the recent failed med mal caps. I believe he will lose his reelection bid.

    The funny thing as a trial esqs we fight this audience everyday and yet when your rights, liberty or property are taken away you have no problem asking for help (and we have no problem assisting you). For many esqs its not just about financial gain. If there ever was a group who didn\’t discriminate it would be trial esqs. We don\’t care who you are or where you came from just that you are a victim in need of help. Hell we believe in you so much you can pay us in 3-5-7 years from now (if you win) and we\’ll even forward all expenses.

    Be wary of those who seek to eliminate or impair your right of recovery. If and when your time comes you may be denied the access to relief that you need to survive.
    For 18 years I have represented people thru no fault of their own have been injured or killed. Sure there are fakers, frauds etc… However, the vast majority of people are normal everyday persons… friends, neighbors and relatives who wished they hadn\’t gotten out of bed that morning. Nobody wants to get hurt. Before you label them, deny them and push them away… remember they are in large part innocent victims.

    Fighting the good fight for all.

    A simple country esq

  • March 15, 2006 at 7:52 am
    Tony Mauhar says:
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    I\’m not ashamed of being an attorney and even identify myself in these posts. I spent 17 years in small town private practice representing all type clients, insurance plaintiff and defendants.For the past five years I\’ve represented state government programs.

    Knee jerk lawyer hating statements generally reflect fear and ignorance.
    The anonymous lawyer hating vitrolic comments of bill , john , and LL reflect ignorance of the real forces underlying perpetual insurance industry premium increases . A deeper analysis of historical insurance rate escalation would focus on the role of the re-insurance industry dominated by Lloyd\’s, et al. Just because the re-insurers want greater and greater profits doesn\’t mean the \”greedy\” lawyers caused the problem.

    And the \”poor agent\” selling those policies operates on the same profit motive: Get it as quick as you can for as long as you can.

    If I wanted to be critical of insurance agents I\’d ask them how many times after a policy is sold and mailed to the insured , you know about 30- 45 days later, does the selling agent contact their customer to schedule an appointment to go over the exclusions from coverage?

    Another observation based on my own experience of visiting marinas and consistently having the largest yachts pointed out as owned by salesmen of various stripes including insurance folks.

    If you want another read on the insurance industry, I invite you to rent the 90\’s movie \”Weekend at Bernies\”.

  • March 15, 2006 at 10:13 am
    Johnson says:
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    Tony, the last comment on the movie was lame, just like the movie. If you remember, it was a comedy, although not
    a very good one.

    Anyway, I do admit there are some good lawyers, and I did once use one because The Hartford (Heartless) refused to return my calls about a claim. Of course, it took 2 years to settle so I really was just wasting my time.

  • March 16, 2006 at 4:42 am
    Jacqueline says:
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    Those of us who are P&C agents are not ashamed of trying to make a living selling a product and a service, either. We just resent the greedy lawyer crowd who all seem to think they are the ONLY ones who have a right to make any money and that everybody else is a crook. We resent that when we call the lawyers\’ hypocritic claims of being so humanitarian-driven out onto the carpet and exposing their hypocrisy, we are then labeled as \”ignorant and uneducated\” by the elitist money-grubbing lawyers. Most lawyers really aren\’t any more intelligent or talented than those of us \”ignorant\” peons with only a bachelors degree – rather the lawyers came from privileged families and were merely wealthy enough to be able to afford to go to expensive law schools right after undergraduate college. The reason property and casualty insurances are skyrocketing beyond consumer affordability is because the insurance carriers, even the reinsurers are not about to go bankrupt and fold for lack of profit- they are in a legitimate business of making money, and they have a right to limit their losses. But greedy lawyers would have the public at large believe that evil insurance companies, and evil commissions-only paid agents are not entitled to make a living for providing the services and products that we are in the business of providing – namely the indemnification products and services. Yet lawyers fall into that fee-paid or commissions-only paid sales group just out to get a fast buck, too. Lawyers must generate a minimum amount of \”billable hours\” in order to remain employed in a firm or be considered for hire by a firm. Billable hours translate to steep fees charged to clients like $150 for a 15 minute telephone call, $300 for forwarding some paperwork copies to the client, etc. Insurance agents don\’t charge outrageous fees for the time we must spend researching and comparing the best coverage for the best price for our potential clients, and how to coordinate the general liability policy w/ the workers comp policy w/ the commercial vehicle policy that has a built-in workers comp rider. Yet according to the elitist money-grubbing lawyer crowd, they would have the public at large believe that selling insurance is no more involved than selling Avon!

    We have an over-litigious nation where people who spill hot coffee on themselves can become millionaires, costing businesses and insurance carriers millions of dollars – all because some lawyer uses his esq license to elicit entitlement attitudes and generate more lawsuit business to create a situation in which they can continuously rake in high fees. Why, you may ask, would lawyers do this? The answer: Because they can and they are just out to rake in big bucks by profiteering off someone else\’s misfortune and they think they\’re the only ones entitled to get paid for their \”sales job\” of selling paperwork for the tort business.

    If lawyers were really in it just for the justice principles, then explain why so many indigent people with no money to afford legal help to acess the justice system end up destitute, financially ruined, or incarcerated or on death row – only to be found innocent 20 years later. If lawyers aren\’t just a bunch of money-hungry commission hounds themselves, why should lawyers be entitled to grabbing up to 35% of some poor disabled person\’s SSI award, when it was the disabled SSI applicant\’s entitlement that he/she should NOT have had to get a lawyer in order to get it in the first place. Insurance agents are trying to make a living indemnifying people in the event of a loss, lawyers are raking in big bucks in the business of screwing other people.

  • March 15, 2006 at 4:45 am
    John says:
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    This is not a study of the efficacy of the protections the civil justice system provides. It\’s a study of all the costs incurred by the entire insurance industry (including non tort items like big fat pay checks for the high powered execs.) to make their huge profits. $260 billion in costs in a trillion dollar industry. I\’m supposed to feel sorry for these big corporations and give up my rights. Hey, if they think the countries that limtit civil rights are so great, they can move there. Get real. Once again the insurance industry trots out its propaganda! Create a phony crisis, blame a particular group of people and then start taking people\’s civil rights. Where have I heard that before?

  • March 15, 2006 at 5:08 am
    bill says:
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    The so-called \”Lawyer who cares\” is full of –it. He gets 30-45% (sometimes more) of every lawsuit won. How is that fair to the poor and disenfranchised?



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