A recent report by The Perryman Group indicates that excessive tort costs are significantly impacting New Jersey's economy, costing $1,885 per resident annually. This financial strain is contributing to revenue losses at federal, state, and local government levels amounting to billions of dollars. The findings, released on November 25, underscore the substantial economic burden, particularly affecting the transportation and warehousing sector.
According to The Perryman Group's report, these excessive tort costs lead to federal revenue losses of $3.2 billion, state revenue losses of $907 million, and local government losses of $758 million. The transportation and warehousing sector alone faces $7.5 billion in total expenditures, $4.9 billion in lost gross product, $3.3 billion in reduced personal income, and 38,100 job losses each year.
As reported by CRC Group, third-party litigation funding (TPLF) has expanded into an $18.2 billion global industry with 52% of investments occurring in the United States. This growth contributes to social inflation by increasing jury awards and settlements, subsequently raising insurance premiums. In 2023, corporate nuclear verdicts exceeded $14.5 billion in total awards, leading insurers to narrow coverage options, expand deductibles, and increase rates—costs ultimately borne by consumers.
According to BusinessWire, a survey conducted by the Insurance Research Council (IRC) for 2024 found that 60% of respondents believe attorney advertising increases the number of auto insurance claims while 52% think it raises auto insurance costs. The report suggests that widespread attorney advertising targeting auto accident claims encourages more legal involvement, resulting in higher settlements and legal expenses that drive up insurance premiums.
The Perryman Group is an economic research and analysis firm based in Waco, Texas. It has served over 3,000 clients including two-thirds of the Global 25 and more than half of the Fortune 100 companies. According to its website, the firm has delivered over 1,000 public policy studies and facilitated trillions of dollars in investments and job creation.