Costs and Compensation Paid in Tort Litigation
Testimony Before the Joint Economic Committee of the U.S. Congress
This paper is the text of testimony presented before the subcommittee on Trade, Productivity, and Economic Growth of the Joint Economic Committee of the U.S. Congress on July 29, 1986. It summarizes preliminary results of RAND research undertaken to provide empirical evidence on the following issues: (1) the total expenditure for tort litigation in state and federal courts in 1985; (2) the proportion of costs that went to plaintiffs' and defendants' legal fees and other litigation expenses, the value of time spent by both litigants and insurance personnel, and the costs of operating the courts; (3) what proportion of the total was net compensation to plaintiffs; (4) the difference in litigation costs and compensation for torts involving motor vehicles and all other torts; and (5) the rate at which the tort system is growing. The study indicates that plaintiffs with tort lawsuits in state and federal courts of general jurisdiction received approximately half of the $27 to $34 billion spent in 1985. The costs of litigation consumed the other half.