Who Really Benefits from Liability Litigation?

Dumont Institute Policy Analysis No. 24

11 Pages Posted: 6 May 1998

See all articles by Robert W. McGee

Robert W. McGee

Fayetteville State University - Department of Accounting

Date Written: July 1996

Abstract

Various studies have estimated the annual cost of product liability litigation alone (not to mention other kinds of liability litigation) in the United States to be between $80 and $117 billion. That's more than the combined gross national products of Bolivia, Chile, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Nicaragua, Panama, Paraguay, Peru and Uruguay or about equal to the annual profits of the top 200 corporations in America. But that's only the direct cost. When you add the indirect costs that are incurred in order to avoid liability -- needless testing, excessive liability insurance costs, etc. -- the total could reach as much as $300 billion a year -- the combined gross national products of Austria, Luxembourg, the Philippines, Portugal and Switzerland. This article discusses the liability litigation situation in the United States.

JEL Classification: K13

Suggested Citation

McGee, Robert W., Who Really Benefits from Liability Litigation? (July 1996). Dumont Institute Policy Analysis No. 24, Available at SSRN: https://ssrn.com/abstract=82596 or http://dx.doi.org/10.2139/ssrn.82596

Robert W. McGee (Contact Author)

Fayetteville State University - Department of Accounting ( email )

Fayetteville, NC 28301
United States

HOME PAGE: http://robertwmcgee.com

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