Tort Costs Up

After a temporary hiatus, tort costs in the United States are rising again. The 2008 Update on U.S. Tort Costs by Towers Perrin finds that U.S. tort costs rose by 2.1 percent or $5.1 billion in 2007, fueled by the first increase in auto accident frequency since 1999. It follows a 5.6 percent decline in tort costs in 2006. Further, due to the current financial crisis and a bunch of other factors such as the potential for increased activity in the area of employment practices liability, Towers Perrin predicts that tort costs will increase by 4 percent in 2008 and an additional 5 percent in both 2009 and 2010. The 2.1 percent increase in tort costs in 2007 compares with an overall gross domestic product (GDP) growth rate of 4.8 percent. Since 1950 growth in tort costs has exceeded growth in GDP by an average of two percentage points. The upshot is that the U.S. tort system cost $252 billion in 2007, which translates to $835 per person  Ã¢â‚¬“ $9 per person more than in 2006. Everywhere we look the call is for more litigation. Check out further I.I.I. info on the liability system.  

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