U.S. Liability Costs Are Much Higher Than CompetitorsJune 12, 2013
The Institute for Legal Reform has released a study which shows that liability costs in the U.S. are dramatically higher than other developed countries. U.S. liability costs are 1.66 percent of the Gross Domestic Product (GDP), over 2 ½ times higher than the European average and 40 percent higher than Canada, the next highest. This translates into annual costs of approximately $260 billion.
The study considered the costs of claims, whether resolved through litigation or other claims resolution processes. Non-litigation claims resolutions would include, for example, resolutions resulting from arbitrations, the use of alternative dispute resolution mechanisms to resolve claims or payments resulting from pre-litigation negotiated settlements.
These high liability costs impede U.S. economic growth, job creation and innovation. They also make U.S. firms less competitive against foreign competitors in both the U.S. market and abroad.
To read the study, click here.