A recent report published in April 2025 by the economic consulting firm, The Perryman Group, entitled “The Economic Impact of Excessive Tort Costs on US Households” describes the significant adverse economic impacts of “unbalanced” civil judicial systems wherein excessive jury awards occur. According to the report, these unbalanced systems result in increased costs for goods and services which weigh upon the average household. The Perryman Group report is a recent example of decades’ long efforts by experts and organizations such as the U.S. Chamber of Commerce to identify anomalies in the civil justice system and to provide bases for reform. The scope and variety of efforts at reforming the legal system as it relates to the law of torts is broad and extensive. The following is a brief description for consideration.
The Law of Torts – Black’s Law Dictionary 12th Edition defines the law of torts as the principles governing the adjudication of “a private or civil wrong or injury, other than a breach of contract, for which the court will provide a remedy in the form of an action for damages.” A lawsuit for an alleged tort is a claim for “wrongdoing.” And the goal of a tort claim is to recover money for the harm caused. In his treatise, The Common Law, the famous U.S. jurist Oliver Wendell Holmes traces the history and evolution of claims of civil law from their ancient societal origins of “vengeance” and the “blood feud” to the modern concept of legal remuneration for injury in money for the damage caused. This basic concept of being awarded money for a caused harm described by Holmes in the 19th century is still the basis of tort law in the 21st century.
Contract Claims vs. Tort Claims – The definition of “tort” found in Black’s Law Dictionary succinctly distinguishes a tort claim from a claim based in contract. One reason for this distinction is that monetary recovery for claims founded upon a breach of contract or a breach of express warranty may be limited by agreement, or the manner of calculation of such recovery may be more specifically defined by agreement of the parties, such that the effects of non-performance or breach of the promise or warranty can be more readily determined. Because tort claims are not founded upon a preexisting agreement (contract) or representation (warranty) the potential recovery for the harm caused is considered broader and more susceptible to the wide discretion of a jury to decide what damages are needed to compensate the injured party (plaintiff) for his/her loss. Legal system analysts and experts consider that the U.S. judicial system has evolved to a point where many state courts have inordinately expanded the rules and applicable law to the point where the jury’s discretion has been allowed to be exploited to extract extremely large money judgments.
Large Verdicts and Risk Aversion – Verdicts in personal injury claims get a lot of press. Plaintiffs may seek recovery for their “economic damages” such as costs for medical care and lost income. But they are also entitled to seek non-economic damages for “pain and suffering” caused by the injury, or the “loss of society” of a spouse or partner if the injury interferes with the parties’ intimate relationship. The amount of money damages awarded for these types of damages can vary widely from jurisdiction to jurisdiction and from state to state. “Excessive verdicts,” (sometimes now called “nuclear verdicts” if they are really excessive), are seen by proponents of reform as significant risks to businesses. The significant amounts of potential non-economic damages that may be awarded a tort plaintiff prevent accurate forecasts of the risks business face in a given state or locale. And while some of those risks may be insurable, insurance carriers likewise must include those potential exposures in their underwriting decisions and eventually the premiums charged to cover the risks. To offset these risks prices may increase for goods and services. Alternatively, businesses may simply decline to participate in a given locale/market thereby reducing available resources, goods and jobs all to the detriment of the affected communities.
In 2019 the U.S. Chamber of Commerce conducted surveys of corporate attorneys and their views of the civil liability risks of the states’ legal systems – the higher the number the worse the state was viewed for civil defendants. As an example, Georgia’s rank fell from 24th to 41st, a significant downward trend . The U.S. Chamber notes Georgia has continued to decline since 2019 with its highest number of “nuclear verdicts” in 2023. A 2024 report by the Brattle Group cited by the U.S. Chamber concluded that the cost of the tort system in Georgia was $19.9 billion in 2022, or $5,050 per household (the Perryman Group report concludes that Georgians’ per household losses from combined inflation costs and earnings losses due to excess torts was $4,494). Reducing the economic uncertainty associated with large verdicts is often one of the stated goals of tort reform efforts.
What Form Does the Reform Take – The battles over tort reform are fought primarily in the state legislatures. Again, Georgia is a good example of recent efforts of reform. Earlier this year the U.S Chamber reported that Georgia Governor Kemp introduced proposed legislative reforms directed at such issues as: how medical care costs/damages in personal injury cases are calculated; the use of trial bifurcation where trials are split so that the issues of liability are decided in one trial, and then damages in another; curtailing a tactic whereby plaintiffs’ lawyers voluntarily dismiss a pending case because of some perceived strategic advantage (weakness of the current evidence or weakness of expert testimony) and then refile it at a later date without any consequence or costs for doing so (a consequence-free second bite at the apple); and allowing juries to hear evidence of whether a person in a car involved in an accident was wearing a seatbelt.
Other general efforts at reform in various states focus on shortening statutes of limitation within which claims must be filed, requiring pre-suit affidavits of a meritorious claim in medical malpractice and other professional liability cases and placing caps on non-economic damages. All these past and future efforts face legal challenges enabled by plaintiff advocacy groups, and in some instances, courts have found that legislative efforts cross the line into impermissible unconstitutional restrictions or cross the line of separation of powers thereby infringing upon the courts’ authority. What seems certain is that the push and pull of these competing interests will continue as states endeavor to address increasing costs associated with substantially higher verdicts.