A recent survey by the American Property Casualty Insurance Association (APCIA) and Munich Reinsurance America, Inc. (Munich Re US) reveals that most Americans are unaware of the negative impacts of certain plaintiff lawyer tactics on their household costs.

The online survey, conducted among more than 2,000 U.S. adults, found that 65% of respondents were unaware of the so-called “tort tax”, an average of $3,621 per American household annually, which is indirectly paid through costs for everyday items like groceries and gasoline. Furthermore, 59% did not know that third parties, such as hedge funds or foreign entities, often secretly finance litigation in exchange for a share of the jury award or settlement.

The survey also highlighted that 47% of respondents were not aware that the plaintiff lawyer in a civil lawsuit is likely to receive most of the jury award or settlement. However, 88% of respondents believed there should be full transparency and disclosure of all who have a financial stake in a civil lawsuit, and 86% agreed that state and federal lawmakers should address abuses of the legal system.

According to a 2021 study from the Perryman Group, the abuse of the legal system in the U.S. results in the loss of 4.24 million jobs, $429.35 billion in output, and more than $110 billion in government revenues annually.

Maura Freiwald, Head of Casualty at Munich Re US, stated, “This survey is an important step in raising awareness and educating the public about the tactics being used and the negative impacts of legal system abuse.” Stef Zielezienski, Executive Vice President and Chief Legal Officer at APCIA, added that “Common-sense reforms, including full transparency and disclosure of all parties with an interest in the outcome of civil litigation, are needed to restore balance to the civil justice system.”

The findings underscore the need for reforms to address the abuses of the U.S. legal system, particularly the predatory advertising tactics and third-party litigation funding that have turned the legal system into an investment market, benefiting secret funders rather than the victim. &

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