Protecting American Consumers Together (PACT), a national advocacy organization, has released a study conducted by The Perryman Group. The study indicates that lawsuit abuse costs the average California family $8,306 annually, making it the highest in the nation. This excessive litigation results in reduced earnings and increased costs for basic necessities for California residents.
The Perryman Group's findings reveal that California families lose an average of $4,430 in earnings each year due to lawsuit abuse, which is nearly double the national household loss of $2,698. Additionally, essential costs are inflated by $3,876 per household in California. Specific increases include prescription medications at 10.509%, home insurance at 5.312%, health insurance at 3.163%, auto insurance at 2.910%, and soap/detergent at 2.510%.
The study also highlights the impact on city budgets, particularly in Los Angeles. LA City Administrator Matthew Szabo said last month that "every dollar that goes towards a liability payout due to a lawsuit is reducing a city service." Los Angeles is expected to pay out at least $320 million this fiscal year in settlements, surpassing its $87 million budget.
Lauren Zelt, PACT Executive Director, commented on the situation: "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." PACT is actively working on raising awareness and pushing for reforms to address this issue both in California and nationwide.
The full study can be accessed through PACT's website.
Information from this article can be found here.