Study Shows Impact of Excessive Civil Tort Costs on Illinois Economy

State’s civil justice system a leading factor in lost jobs and revenue

Illinois Civil Justice League (ICJL) today released the 2018 Economic Benefits of Tort Reform, an assessment measuring the impact of excessive civil court costs on Illinois’ economy. The study, conducted by The Perryman Group for Citizens Against Lawsuit Abuse (CALA), found that Illinois is losing jobs and revenue because of the state’s civil justice system. The assessment included extensive survey data, industry information and a variety of corroborative source material. 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 total current impact of excessive tort costs on the Illinois economy amounts to estimated losses of $4.5 billion in annual direct costs and $7.7 billion in output (gross product) annually. About 81,685 jobs are lost when dynamic effects are considered. All major industry groups are negatively impacted, with total manufacturing, business services, transportation and utilities and financial activities industries showing the greatest losses. The yearly fiscal losses (as of 2018) are estimated at $397.2 million in state revenues and $335.4 million to local governments. These effects are based on the current size of the state’s population and economy and can be expected to rise over time in the absence of meaningful civil justice reforms.

“Reforms to our civil justice system in Illinois must be a priority. Unwarranted lawsuits and enormous plaintiff awards impact all sectors of our state economy and hurt our families, as costs are ultimately passed down to our shoulders in the form of higher prices for goods and services,” said President of Illinois Civil Justice League, John Pastuovic.

Civil justice reforms that have resulted in the greatest reduction in losses are those aimed at reducing frivolous lawsuits, capping appeal bonds, setting negligence standards and limiting non-economic damages. These reforms have been shown to enhance innovation and increase productivity, as well as to improve judicial efficiency and economic performance.


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Opinions


Editorial: Legal Reform Requires Careful Negotiations

From the Bloomington Pantagraph and Decatur Herald & Review

The state of Illinois either has one of the nation’s worst judicial climates, or is a state where the ordinary plaintiff has a fair chance to win against corporate giants.

It just depends on who you ask. More importantly, it depends on where the money is located.

That’s the result of the news last week that the U.S. Chamber of Commerce was proclaiming the Illinois lawsuit climate was one of the worst in the nation.

According to a survey conducted for the Chamber’s Institute for Legal Reform by Harris Poll, the chamber said only Louisiana and West Virginia have worse lawsuit climates.

The results are based on questionnaires asked of senior company attorneys about how a state’s lawsuit environment is likely to affect important business decisions. So, at best, the results of the survey were pretty predictable.

However, Gov. Bruce Rauner lent his support to the issue, saying the lawsuit environment in the state is hampering economic growth.

“You come here, you open yourself up to attack and excessive judgment against your company,” the governor said.

Rauner has proposed legislation that he says will put the system more into balance. Those reforms include medical awards based on charges rather than actual payments, changing overly inclusive liability standards and limiting venue shopping by plaintiffs.

View the full editorial at the Bloomington Pantagraph…

News Update


Illinois Will Delay Pension Payment, Citing Cash Shortage

From Crain’s Chicago Business

Illinois will delay payments to its pension fund as a prolonged budget impasse causes a cash shortage, Comptroller Leslie Geissler Munger said.

The spending standoff between Republican Governor Bruce Rauner and Democratic legislative leaders has extended into its fourth month with no signs of ending. Munger said her office will postpone a $560 million retirement-fund payment next month, and may make the December contribution late.

“This decision is choosing the least of a number of bad options,” Munger told reporters in Chicago on Wednesday. “For all intents and purposes, we are out of money now.”

Munger said the pension systems will be paid in full by the end of the fiscal year in June. The state still is making bond payments, and retirees are receiving checks, she said.

“We prioritize the bond payments above everything else,” Munger told reporters.

The pension payment delay was inevitable, said some who have been watching the budget gridlock.

“This is just the tip of the iceberg,” said Ralph Martire, executive director of the Chicago-based Center for Tax and Budget Accountability, which monitors Illinois finances.

“Every month they go without resolving the impasse on the budget means it’ll cost more to ultimately resolve it,” Martire said. “This is a natural, predictable consequence if you do something called math.”

Read more in our daily News Update…