How to Use This Guide

The American civil justice system is the costliest in the world.1 Litigation costs affect the ability of businesses to compete and prosper. By adding rationality and predictability to the system and rooting out unnecessary expenses and abuse, civil justice reform can increase confidence in the economy, help businesses expand, and create jobs. Reforms can also foster respect for the judicial system, which is too often characterized by liability that is disproportionate to responsibility, inconsistent outcomes, and jackpot verdicts.

Each year, the tort system results in over $400 billion in costs, an amount equivalent to 2.3% of the U.S. gross domestic product or about $3,300 per household.2 These costs vary significantly from state to state, reflecting differences in risk exposure, legal liability, and efficiency.

101 Ways to Improve State Legal Systems offers some of the many options available to foster a sound legal system that promotes states' economies.3 It considers fair and effective measures that would safeguard the integrity of the litigation process, promote rational liability rules, address over-regulation and enforcement, improve product liability law, and rein in excessive awards.4

101 Ways considers key issues confronting policymakers. For example, when government officials hire contingency fee lawyers, are there safeguards states can put in place to ensure that law enforcement is driven by the public interest, not the financial interest of attorneys with a stake in the litigation? What role should a business's compliance with government safety standards play in product liability litigation? How can the law address damages that exceed actual losses, subjective pain and suffering awards that have become the largest part of tort damages, and punitive damages "run wild"? This report answers these questions and more.

Among the new areas considered in this Sixth Edition of 101 Ways are:

  • How can states discourage or control duplicative litigation brought by local governments?
  • How can states respond to misleading lawsuit advertising that may needlessly scare people away from seeking medical care or lead them to stop taking a prescribed medication?
  • How can states proactively avoid liability expansions that may result from recent American Law Institute Restatements?
  • How can states encourage adoption of safeguards to protect sensitive consumer information without enabling no-injury class action lawsuits or discouraging use of innovative technologies that improve security?

This guide presents legal reform options in a conceptual manner by topic. It then directs readers to summaries of legal reform bills enacted in the states over the past five years. These recent laws show how legislators can move the proposals described in this guide from theory into practice.

Inclusion of a legal reform in this report does not necessarily mean that the U.S. Chamber Institute for Legal Reform (ILR) endorses a certain approach or favors one specific option over another. The options included in each section must be evaluated in light of a specific state's political and legal landscape. The order in which reforms are presented does not reflect their level of importance, priority, or effectiveness. ILR presents these options and recently enacted legislation to provide a useful resource to the reader.

Footnotes

1. See David L. McKnight & Paul J. Hinton, International Comparisons of Litigation Costs 2 (Inst. for Legal Reform, June 2013).

2. Paul Hinton et al., Costs and Compensation of the U.S. Tort System 26 (Inst. for Legal Reform, Oct. 2018).

3. As the report has grown over six editions, it presents "101 Ways" in a figurative sense. A count of the reform options and recently enacted legislation presented in this report will likely exceed that number.

4. The Economist has observed that America's enforcement system is "the world's most lucrative shakedown operation." Tom Easton, The Criminalisation of American Business, The Economist, Aug. 24, 2014.

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.