From the Illinois Civil Justice League
A new regional analysis of the economic impact of the state’s tort system shows $3.8 billion in annual direct tort costs to Chicago consumers, equaling $811.13 per resident. If the costs were returned to the economy, the amount would equal the salaries of approximately 68,024 jobs in the metro-Chicago area.
“It’s no secret that the State of Illinois, and especially Cook County, is home to an aggressive plaintiff’s attorney bar,” said John Pastuovic, president of the Illinois Civil Justice League. “While Chicago residents have been hit hard this legislative cycle with new taxes and regulations out of the legislative action in Springfield, it is easy to forget that more than two decades of inaction on important civil justice-related reforms is literally taking more than three thousand dollars annually out of each and every family’s pocketbook.”
Pastuovic called for reforms to the State’s civil justice system, calling the decades of inertia by the Illinois legislature harmful to the State’s economic and job-creating environment. “It’s past time for the legislative leaders in the House and Senate to pass common sense legislation to bring Illinois from the very bottom of the Midwest to the middle of the pack,” said Pastuovic.
Pastuovic stated that border communities, like those near neighboring Indiana and Wisconsin, are often hit the hardest when a state’s business climate ranks low compared to its neighbors. Pastuovic stated unfortunately this is also true when it comes to an unchecked trial bar who work to coopt the state’s laws to benefit themselves, instead of consumers and small businesses.
“One great example,” Pastuovic cited, “is the discrepancy between neighbors Wisconsin and Indiana, compared to Illinois, regarding joint and several liability for local businesses.”
“It may sound like an arcane legal term but, in Illinois, a business or resident can be found as little as 25 percent liable for an injury in court and be forced to pay the entire judgement. In Wisconsin, that standard is 51 percent fault. In Indiana, defendants never pay a dime more than the share of their liability. This is a major hurdle in providing a stable legal climate for new business and job growth in Illinois,” said Pastuovic.
“It would take very little in compromise to bring Illinois to a 50 percent standard for joint and several liability, which would still be the lowest standard in the Midwest,” said Pastuovic. “But, doubling the current standard and requiring a defendant to be at least half at fault before paying the entire judgement would signal to job creators that Illinois is trying to bring greater fairness to the system.”
So, while additional new taxes and regulations are burdening Illinoisans, Pastuovic said Chicago consumers should not forget the $3.8 billion in direct costs of excessive litigation in Illinois as detailed in the study of annual tort costs conducted by The Perryman Group.
“The pendulum has swung wildly towards the trial lawyers, at the expense of consumers,” stated Pastuovic. “This year, three or four major trial lawyer-supported legislative initiatives, that further enrich lawyers and take money from consumers, have or will become law. They include an expansion of occupational disease lawsuits (SB 1596) and consumer fraud lawsuits (HB 2472). Money for the oversized settlements and verdicts from these initiatives just doesn’t grow on trees. Ultimately it comes from the increased price of goods and services, or from lost employment opportunities.”
The annual “tort tax” robs more than 81,685 jobs from the Illinois economy, according to the study. Furthermore, the excessive litigation extracts an extra $732 million in revenues from state and local governments, causing additional taxation of Illinois residents. The Perryman Group analyzed outcomes in the state of Illinois using Ohio as a control state, which has engaged in notable tort reform in the recent past. The assessment included extensive survey data, industry information and a variety of corroborative source material.