From Towers-Perrin, a global professional services firm, their annual tort costs study. Notable subhed: “First Decrease in Tort Costs Since 1997, but Signs Indicate Trend Will Not Continue”:
Stamford, CT., December 12, 2007 — U.S. tort costs totaled $247 billion in 2006, which is approximately $825 per person and $57 less per person than in 2005, according to the 2007 Update on U.S. Tort Cost Trends from the Tillinghast insurance consulting practice of Towers Perrin. Tort costs declined by 5.5% in 2006, significantly lower than the growth rate of 0.4% in 2005, 6% in 2004 and 5.5% in 2003. The $13.4 billion decrease over tort costs in 2005 marks the first downward trend since 1997. The 2007 report analyzes U.S. tort costs from 1950 through 2006, with projections through 2009.
Reasons for the improvements? Stable med-mal costs, drops in auto claims, and diminishing asbestos claims. And coming up …
“In 2006, the modest decline in personal tort costs was combined with a significant drop on the commercial side,” said Russ Sutter, Towers Perrin Principal. “However, given several factors, including the potential fallout from the current subprime loan crisis, we anticipate a reversal in 2007. To put it bluntly, when people lose money, litigation tends to follow.”
A good summary of the factors that could come into play follows:
The full report is available here in .pdf format.
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