Our Atlanta Georgia law firm has long argued that insurance costs depend more on insurance company premium investment returns rather than claims by injured people. Now there is more information that lawsuit inflation is a myth.
Insurance Information Institute
Tort inflation is a constant threat to the health of the insurance industry and the U.S. economy. Large increases in tort costs lead to higher insurance costs and can harm businesses trying to grow. In this report, the Insurance Information Institute examines the state of tort inflation in the United States. As with last year's report, the current environment in some ways seems calm: the average jury award has peaked at just over $1 million; tort costs rose modestly to $838 per person in 2008, though costs are projected to increase in subsequent years; and settlements in securities class actions rose to $3.8 billion in 2009 but remain far below the peak years of 2005-2006. However, there are signs that tort inflation may be returning: businesses in the U.S. and U.K. anticipate more legal disputes--40 percent of companies anticipate facing more legal disputes in the coming year; the largest jury verdicts are getting bigger.
The 10 largest jury verdicts in 2009 totaled $1.5 billion, an increase of 12 percent from 2008; trends in presidential appointments and policy directives could give the appearance of a shift away from principles that rein in tort inflation the overall number of actions filed with the Equal Employment Opportunity Commission dipped slightly in 2009, but remains substantially above the levels of 2007 and prior; terrorism remains a liability threat and current proposals could weaken the ability of insurers to offer coverage; and tort costs associated with medical malpractice have fallen four years in a row, an apparent example of the effectiveness of malpractice caps. However, court decisions
