Tort System Study May be Flawed
Cleburne News (AL)
March 24, 2005


Facing mounting criticism over its misleadingly-titled annual report, U.S. Tort Costs, Tillinghast-Towers Perrin, an insurance industry consulting firm, has finally admitted that its annual "Trends and Findings on the Cost of the U.S. Tort System" has nothing to do with the costs of litigation, courts, or the legal system.

Tillinghast’s latest report, which puts tort system costs at the wildly-inflated figure of $246 billion, states for the first time, "the costs tabulated in this study are not a reflection of litigated claims or of the legal system." (U.S. Tort Costs: 2004 Update, at 4.) Rather, they are based on figures generated from the wasteful and inefficient insurance industry, even going so far as to include its administrative costs, says the Center for Justice and Democracy.

Rather than removing such costs from its analysis after being repeatedly criticized for including them, Tillinghast states, "Our inclusion of such costs has been questioned since those costs are not directly related to the disposition of specific tort claims. We take no position on the efficiency of the insurance industry’s administrative expenses."

Tillinghast has never made any attempt to examine jury verdicts, settlements, lawyers’ fees or any costs that might actually be considered part of the legal system. Indeed, it now confirms much of the criticism launched by Americans for Insurance Reform last year, including the fact that it even includes insurance claims "with no suits filed."

For a copy of the complete article, contact AIR.