A report from The Perryman Group reveals that Nevada's excessive tort costs result in a $203 million annual loss, or $1,249 per resident, contributing to federal revenue losses. The findings were released on November 25, 2024, highlighting the broader impact on the state's economy.
The report states that Nevada faces $738 million in annual federal revenue losses, $203 million in state losses, and $173 million in local government losses due to excessive tort costs. In the transportation and warehousing sector, the impact includes $2.6 billion in total expenditures, $1.7 billion in lost gross product, $1.2 billion in reduced personal income, and 12,600 job losses each year.
According to the American Tort Reform Association (ATRA), the rise of third-party litigation funding (TPLF) has raised concerns about its impact on the legal system. TPLF can increase litigation costs and create potential conflicts of interest as funders may influence legal strategies to maximize their returns. ATRA also highlights ethical issues, including threats to a lawyer’s ability to exercise independent judgment.
As reported by the Insurance Information Institute (III), TPLF has contributed to rising insurance costs in the auto industry. The III notes that excessive litigation fueled by TPLF has led to higher auto insurance premiums. In 2023, insurers paid out more than $1.10 for every $1 in premium collected, highlighting losses exacerbated by litigation-related expenses.
The Perryman Group, based in Waco, Texas, is an economic research firm with over 40 years of experience serving clients such as Fortune 100 companies and U.S. Cabinet Departments. The firm has completed over 1,000 public policy studies on critical economic and social issues.