TORT COSTS REACHED RECORD HIGH IN 2003

U.S. tort costs reached a record $246 billion in 2003, or about $845 per person, according to U.S. Tort Costs: 2004 Update from the Tillinghast business of Towers Perrin. This represents a 5.4 percent increase in tort costs from 2002–a much slower growth rate than the prior two years (13.4 percent increase in 2002; 14.7 percent increase in 2001).

The 2004 update analyzes tort costs from 1950 through 2003, with projections into 2006. The 5.4 percent rate of growth in tort costs in 2003 slightly exceeded overall economic growth (as measured by gross domestic product–GDP) of 4.9 percent.

Commercial tort costs grew by only 5.5 percent in 2003, compared to 20 percent in 2001. Medical malpractice tort costs in the U.S. totaled $27 billion, or $91 per person, in 2003. The growth in these costs–11.8 percent per year on average since 1975–continues to outpace that of total tort costs, which has averaged 9.2 percent per year.

Topics USA