Thursday, May 18, 2006

USA - the Tillinghast Study on tort costs - "bogus" and "propaganda"?

The latest Tillinghast Towers Perrin (insurance industry consulting firm) study on the costs of tort in the US estimated that the costs reached $260 billion annually (2005 update).
It also estimated that the costs would be rising by 6,5% in the next three years, subject to a number of factors, for instance litigation related to directors and officers of publicly held companies, litigation concerning some prescription drugs, any litigation resulting from the Hurricane Katrina and recent medical malpractice reforms in many states
(see the forthcoming comments on our blog on the proposed changes to the UK Company Law Bill aimed at reducing possible litigation against company directors).

Ken Suggs, the president of the Association of Trial Lawyers of America referred to the study as a "phoney study" and "propaganda". He pointed out that the real costs were created by those who caused injuries. The Association disputes the methodology used by the study which includes "questionnable statistics" such as payouts for minor accidents, rents on office buildings and insurance company CEOs salaries (as reported by The Colorado Springs Business Journal on 12 may 2006).

Whether the study and its methodology are reliable or not, there is no doubt that the costs of tort litigation are crucial and need to be monitored. The study offers some valuable insight into the changes in the profile of tort litigation in the US - slow decrease of person-to-person litigation (as a result of tort reforms) and an increase in commercial litigation.

We welcome comments on the study and its value.


Criminal Defense Attorneys Mesa said...

Phoney on what basis? I recall reading on the Tillinghast study, but the results and the implications of which are lost on me now.

kensingtondental said...

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