U.S. Legal System Ranked As Most Costly
From Corporate Counsel
The U.S. legal system is the world’s most costly, according to a study released this week [PDF] by the U.S. Chamber Institute for Legal Reform (ILR). The study, conducted by NERA Economic Consulting, showed that the American system costs about one and half times more than the Eurozone average.
The NERA study compared liability costs as a percentage of a country’s gross domestic product. The 13 countries included in the study have similar levels of regulation and legal protection, leading analysts to conclude that higher costs could be attributed to more frequent and/or costly claims.
The U.S. costs were about 1.7 percent of GDP. Countries on the low end of the range—the Netherlands, Belgium, and Portugal—had costs around 0.4 percent. Legal liability costs in the U.S. were found to be about 50 percent more than costs in the U.K.
ILR president Lisa Rickard says excessive litigation is putting U.S. companies at a competitive disadvantage globally. Lawsuits create high costs for businesses, she says, and they affect consumers, employees, and the overall economy.
“The worse a litigation system becomes in a country,” says Rickard, “the more companies think twice about whether or not to do business there, to locate there, to expand there.”
A Reuters article Thursday cited antitrust plaintiffs lawyers Douglas Richards and Michael Eisenkraft, who counter the ILR survey’s conclusions. The lawyers central argument is that many of the pro-business procedures, “made on an ad hoc basis rather than through a formal rule process, have compounded ‘the problems of cost and delay that they often were ostensibly intended to solve.’ "
ILR also released the results of a survey of 800 registered U.S. voters’ views on class action lawsuits [PDF]. Sixty-nine percent of respondents said they thought there had been an increase in abuse of the legal system over the last decade.
Read more in our daily News Update...
From Corporate Counsel
The U.S. legal system is the world’s most costly, according to a study released this week [PDF] by the U.S. Chamber Institute for Legal Reform (ILR). The study, conducted by NERA Economic Consulting, showed that the American system costs about one and half times more than the Eurozone average.
The NERA study compared liability costs as a percentage of a country’s gross domestic product. The 13 countries included in the study have similar levels of regulation and legal protection, leading analysts to conclude that higher costs could be attributed to more frequent and/or costly claims.
The U.S. costs were about 1.7 percent of GDP. Countries on the low end of the range—the Netherlands, Belgium, and Portugal—had costs around 0.4 percent. Legal liability costs in the U.S. were found to be about 50 percent more than costs in the U.K.
ILR president Lisa Rickard says excessive litigation is putting U.S. companies at a competitive disadvantage globally. Lawsuits create high costs for businesses, she says, and they affect consumers, employees, and the overall economy.
“The worse a litigation system becomes in a country,” says Rickard, “the more companies think twice about whether or not to do business there, to locate there, to expand there.”
A Reuters article Thursday cited antitrust plaintiffs lawyers Douglas Richards and Michael Eisenkraft, who counter the ILR survey’s conclusions. The lawyers central argument is that many of the pro-business procedures, “made on an ad hoc basis rather than through a formal rule process, have compounded ‘the problems of cost and delay that they often were ostensibly intended to solve.’ "
ILR also released the results of a survey of 800 registered U.S. voters’ views on class action lawsuits [PDF]. Sixty-nine percent of respondents said they thought there had been an increase in abuse of the legal system over the last decade.
Read more in our daily News Update...