The excessive costs of the US tort system continue to rise. While the civil justice system is clearly a crucial institutional framework in America, it is possible for it become imbalanced, leading to excessive tort costs. When functioning properly, the system provides a fair and equitable forum for the resolution of disputes among parties, appropriately compensating those that have legitimately been harmed. Additionally, it acts as an effective deterrent to undesirable behavior. The civil justice system is designed to provide proper remedies for injured parties and incentives for responsible actions; it is not intended to be punitive, random, or unpredictable.

On the other hand, a flawed civil justice system which generates exorbitant levels of damages or numbers of awards and which is unpredictable in its outcomes may result in negative impacts through the misallocation of society's scarce economic and human resources. When such imbalances occur, tort reform can lead to substantial benefits, and states which have implemented reforms have seen improved judicial efficiency and measurable enhancements to economic performance.

Tort litigation can be highly beneficial to society in terms of promoting equal and impartial justice as well as establishing part of the critical context in which economic activity can prosper. It provides for systematic resolution of disputes, reduces conflict, and encourages production using safe practices that benefit society as a whole. Tort reform which reduces imbalances and therefore reduces excess costs can lead to significant benefits.

In order to evaluate the actual and potential economic benefits of tort reform in the US, states, and the District of Columbia, The Perryman Group (TPG) quantified the aggregate excess costs associated with the current system, allocated this amount across states based on the cost relative to overall economic activity, and examined the resulting downstream effects. Effective reform measures can reduce or eliminate these costs to the benefit of each state. Note that this report follows the same basic structure used in prior years to allow for comparison across time periods while incorporating extensive new information.

For more details please refer to the full report.