Costs and Compensation Paid in Tort Litigation

by James S. Kakalik, Nicholas M. Pace


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This study was undertaken to answer the following questions: What was the total expenditure nationwide for tort litigation terminated in state and federal courts of general jurisdiction in 1985? How much of the total was spent for the various costs of the tort litigation system: plaintiffs' and defendants' legal fees and other litigation expenses, the value of litigants' time spent on the lawsuits, the value of time spent by insurance personnel, and the costs of operating the courts? How much of the total was net compensation to plaintiffs? How do litigation costs and compensation paid differ for torts involving motor vehicles and for all other torts? How fast is the tort system growing? The study indicates that plaintiffs with tort lawsuits in state and federal courts of general jurisdiction received approximately half of the $27 billion to $34 billion spent in 1985. The costs of litigation consumed the other half.

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