The Insurance Information Institute (Triple-I) and Munich Reinsurance America, Inc. (Munich Re US) have released a new consumer guide addressing the impact of legal system abuse on consumers and businesses in the United States. The guide, titled "A Consumer Guide: How Legal System Abuse Impacts You," examines how litigation tactics such as aggressive attorney advertising, third-party litigation financing, and persuasive jury "anchoring" techniques contribute to excessive tort costs, delay settlements, and reduce the actual awards plaintiffs receive.
Joshua Hackett, Head of Casualty at Munich Re US, commented on the issue stating, "Legal system abuse has driven up litigation expenses and costs, impacting businesses and consumers across the United States. If left unchecked, these rising costs will continue to increase insurance premiums and limit coverage options."
According to the guide by Triple-I/Munich Re US:
- Legal system abuse adds $6,664 in annual costs for an average American family of four.
- 4.8 million jobs have been lost in the U.S. economy due to excessive litigation.
- Small businesses face over $160 billion in annual tort costs.
The guide challenges the notion that plaintiffs benefit significantly from large settlements. Often, third-party investors and legal fees consume a large portion of awards—sometimes more than half—while plaintiffs may also incur additional costs like medical expenses and case fees.
Sean Kevelighan, CEO of Triple-I, remarked on this issue: “While billboard attorneys use exploitative advertisements promising big dollar settlements, the truth is consumers and business owners can be left with less money, sometimes substantially less than if the likes of third-party litigation financiers are involved. The big business of U.S. law is increasing costs for everyone, which is why it’s vital Americans understand what’s happening and push for legal reform.”
The consumer guide calls for increased awareness among consumers regarding legal system abuse's impact on insurance coverage costs. It advocates for greater transparency in third-party litigation financing, curbs on inflated medical billing, and more responsible legal advertising.
Triple-I has been a trusted voice in risk and insurance since 1960. As an affiliate of The Institutes, it represents nearly 50% of all U.S. property/casualty premiums written through its diverse membership including mutual and stock companies serving various markets.