Episode 6

The American Justice Partnership (AJP) released a new study published by the Pacific Research Institute illustrating the direct and indirect costs of the American tort system.  At an annual cost of $865 billion, the figure dwarfs the $65 billion the federal government spends on schools and education and the $260 billion that Americans gave to charities in 2005.  In fact, the figure dwarfs the $500 billion Pentagon budget for managing conflicts in Iraq and Afghanistan in 2006. A family of four pays an average $9,827 in a "tort tax."  By comparison, the average family of four paid $6,884 in state and local taxes in 2004.  The study takes into account the economic disruption caused by the inefficiencies in our legal system.  Defensive medicine, a practice necessitated by excessive medical malpractice litigation, for example, costs $124 billion per year and has added 3.4 million people to the ranks of the uninsured. 

This is a powerful new study that will add hard figures to the debate over the need for legal reform.  Read the NAM’s news release and visit the AJP release for the full report and additional background, including a video interview with study co-author Dr. Lawrence McQuillan.