Legal System Abuse May Be Driving Up Costs for Wyoming Businesses

The rising costs of lawsuits, particularly tort cases, are a growing burden on the U.S. economy. According to the U.S. Chamber’s Institute for Legal Reform (ILR), the U.S. tort system’s total costs and compensation reached a staggering $529 billion in 2022—equivalent to 2.1% of the U.S. GDP or $4,207 per American household.

Since 2016, the average annual growth rate of tort costs has been 7.1%, climbing to 8.7% for cases involving businesses. If these trends continue, total tort costs could surpass $900 billion by 2030.

The tort system provides a crucial legal framework for resolving civil disputes through monetary compensation for harm. It spans federal, state, and local courts, as well as arbitrations, mediations, and other dispute resolution settings. While the system aims to deliver justice, it’s increasingly being exploited by some plaintiffs’ attorneys who file abusive lawsuits, employ misleading advertising, or partner with third-party funders who reduce plaintiffs’ recoveries while driving up costs. This misuse often turns the system from a means of justice into a profit-driven machine, harming both defendants and the very plaintiffs it was designed to protect.

In Wyoming, the tort burden is significant but lower than the national average. Here’s how it breaks down:

• $2,886 per household in tort costs.

• $675.7 million in total tort costs statewide.

• 1.4% of Wyoming’s GDP dedicated to tort costs.

• An average tort cost growth rate of 4.4% from 2016 to 2022.

When the tort system is misused through frivolous lawsuits or third-party litigation funding, it shifts the focus from justice to profit, leaving Wyoming businesses and their communities footing the bill. We care because a fair legal system is critical to fostering a stable business environment in Wyoming. By advocating for balanced reforms, we aim to protect local businesses from excessive legal burdens and ensure they can continue driving our state’s economic growth.