Tort Costs in America Report: Chamber Puts Lawsuit Costs at $655.6 Billion, $4,900 a Household

The U.S. Chamber of Commerce Institute for Legal Reform (ILR) released the fourth edition of its Tort Costs in America report on November 5, 2026, estimating that costs and compensation paid through the U.S. tort system reached $655.6 billion in 2025, equal to 2.12% of GDP and more than $4,900 per household. The Tort Costs in America report, prepared by the Brattle Group, says those costs have grown 7.8% a year since 2019, and it will be the business lobby's headline number when state legislatures open their 2027 sessions on damages caps, litigation funding and venue.

The figure is an advocacy estimate, not a government statistic, and the plaintiffs' bar has attacked earlier editions' method. Both points matter for how the number gets used. What follows sets out what the report actually says, what it counts, how it compares with the three earlier ILR estimates, the state figures that have been published so far, and what the release means for personal injury firms, defense counsel, insurers and litigation funders.

What does the Tort Costs in America report say?

The headline finding is a single national total: $655.6 billion in tort "costs and compensation" for calendar year 2025. ILR translates that into two ratios that will appear in testimony and op-eds for the next two years: 2.12% of U.S. gross domestic product, and more than $4,900 for every U.S. household.

The growth claim is the second pillar. According to the Chamber's release, tort costs have risen at an average annual rate of 7.8% since 2019, which ILR describes as faster than the economy and about twice the pace of inflation. ILR president Stephen Waguespack framed the total as "another hidden cost" landing on families, money that the Chamber argues ends up embedded in insurance premiums, health care and the price of goods and services.

The third pillar is state-level data. The fourth edition estimates per-household tort costs for every state, and the Chamber has used the state numbers to argue that reform works, pointing to Florida's 2023 civil justice package as evidence.

Three things the report does not do are worth stating plainly. It does not measure what any household actually pays out of pocket. It does not separate "meritorious" from "meritless" claims. And it does not, in the material the Chamber has published so far, break the 2025 total down by line of business the way the previous edition did. Practitioners citing the study, for either side, should keep those limits in view.

How much do lawsuits cost the average American household?

According to the Chamber, more than $4,900 a year. That number is derived by dividing the national total of $655.6 billion by the number of U.S. households. It is an allocation, not a bill. No household receives an invoice for $4,900, and the figure assumes that every dollar of tort cost is passed through to consumers in some form, whether through liability insurance premiums, prices or wages.

The per-household framing has history. The 2022 ILR study put the figure at $3,621 for 2020, and the third edition, released in November 2024, put it at $4,207 for 2022. The roughly $700 jump between the third and fourth editions is the number the Chamber's state affiliates are likely to emphasize.

A point often lost in coverage: "costs and compensation" includes the compensation itself. The total counts payments to injured people for medical bills, lost wages and pain and suffering, as well as legal fees on both sides and insurers' administrative costs. Earlier ILR work estimated that only part of each dollar reaches claimants: the 2018 study, covering 2016, put the claimant share at 57%, and the 2022 study, covering 2020, at 53 cents of every dollar. Read that way, a large share of the "$4,900 per household" figure is money paid to other households whose members were injured.

Which states have the highest tort costs per household?

The Chamber's landing page for the fourth edition lists a selection of high-cost states rather than a clean ranking, and the full 50-state table sits in the PDF. The figures published on the page so far are below.

State	Tort costs per household (2025)	Note
Delaware	$7,814	Listed first among high-cost states
Connecticut	$6,197
Florida	$6,149	Down four places after 2023 reforms
California	$5,935	Ranked highest in the 2022 data at $5,429
Illinois	$5,440
Louisiana	$4,955
West Virginia	$2,569	1.71% of state GDP; $1.903 billion total
United States	more than $4,900	$655.6 billion, 2.12% of GDP

Delaware's position is the striking change. It is the corporate-law and bankruptcy venue of choice for much of American business, and a per-household figure spread across a small population can run high when large commercial disputes are counted there. The Chamber's published material does not explain the allocation. California, which led the third edition, still sits well above the national average.

West Virginia is the reverse case. In the third edition the Chamber called it the cheapest state in the country at about $2,100 per household in 2022, crediting its legislature's reform record. The fourth edition puts it at $2,569. That is still roughly half the national figure, but it is an increase, and the published material does not say whether West Virginia remains last.

Several states that practitioners watch closely, including Georgia, Texas, New York and Pennsylvania, do not appear in the indexed list. Their fourth-edition figures were not verifiable for this article and are omitted rather than estimated.

How fast are U.S. tort costs growing?

The fourth edition's answer is 7.8% a year since 2019. The table below sets the four ILR estimates side by side.

Data year	Report released	Total	Share of GDP	Per household	Growth claim
2016	Oct. 2018	$429 billion	2.3%	about $3,300	57% to claimants
2020	Nov. 2022	$443 billion	2.1%	$3,621	about 6% a year, 2016 to 2020; 53 cents to claimants
2022	Nov. 2024 (third edition)	$529 billion	2.1%	$4,207	7.1% a year, 2016 to 2022
2025	Nov. 2026 (fourth edition)	$655.6 billion	2.12%	more than $4,900	7.8% a year since 2019

Two observations stand out. First, the total has grown far faster than the GDP share. Between the 2022 and 2025 data years the dollar figure rose about 24%, but the share of GDP barely moved, from 2.1% to 2.12%. Nominal GDP growth over the same period absorbed most of the increase. That is the strongest point available to critics who argue the system is not consuming a growing slice of the economy.

Second, the growth rate depends on the window. A separate ILR and Insurance Information Institute (Triple-I) analysis published earlier in 2026 measured U.S. tort costs rising from $299.7 billion in 2014 to $579.7 billion in 2023, a pace of about 10.38% a year against nominal GDP growth of 5.17% and inflation of 2.74%. Triple-I split the 2023 figure into $377.73 billion in commercial lines and $202.01 billion in personal lines. That dataset uses different inputs and a different period, and it was built for an international comparison, so its numbers should not be mixed with the fourth edition's.

The third edition also broke its 2022 total into $296.5 billion of general and professional liability, $215 billion of automobile liability and $17.5 billion of medical liability, and projected that U.S. tort costs would near $1 trillion by 2030 at the then-current pace. The Chamber's published material on the fourth edition does not repeat a line-by-line split or a 2030 projection.

Who wrote the Tort Costs in America study, and who paid for it?

The Brattle Group, an economic consulting firm, composed the study, and ILR, the Chamber's legal reform arm, published it. Brattle principals David McKnight and Paul Hinton authored the earlier editions, and the Chamber's tort-cost pages credit the figures and the methods report to them while noting that the surrounding commentary is ILR's own.

On method, the Chamber's materials say the figures draw on Brattle analysis of insurance data, including Verisk's MarketStance and the National Association of Insurance Commissioners (NAIC), and that they include the cost of private settlements, which studies built only on public verdict records miss. That last feature is why the study is larger than most academic estimates: most tort dollars change hands in settlements no court ever reports.

ILR is an advocacy organization. Its mission is to reduce what it calls lawsuit abuse, and it funds and promotes tort reform in state legislatures. That does not make the arithmetic wrong, but it does mean the framing, including "hidden cost" and the per-household allocation, is the Chamber's choice, not a neutral convention.

Did Florida's 2023 tort reform lower tort costs?

According to the fourth edition, yes, modestly. Florida's tort costs fell from 3.35% to 3.11% of the state's economy after the 2023 reforms, and the state dropped four places in the per-household ranking. The Chamber itself describes the effects as only beginning to appear.

Florida's 2023 package, enacted as HB 837, moved the state from pure to modified comparative fault, cut the general negligence statute of limitations from four years to two, reined in one-way attorney fee shifting against insurers, and changed how medical damages are proven. Florida remains expensive by the Chamber's measure, at $6,149 per household, third on the published list. The more useful reading for practitioners is directional: the Chamber will cite Florida as proof of concept in every state where a similar package is pending.

There are limits. A decline in tort costs as a share of GDP can come from either side of the fraction, and Florida's economy grew quickly over the period. The report's state ratios also cannot show whether injured people with valid claims recovered less, which is the plaintiffs' bar's central objection to the Florida law.

What do plaintiffs' lawyers say about the Chamber's tort cost numbers?

The trial bar rejects both the method and the premise. When the third edition came out in November 2024, Lori Andrus of the American Association for Justice (AAJ) told Spectrum News that the Chamber is funded by large corporations that stand to gain from a more restrictive tort system, and questioned how the study calculated liability insurance premiums. "No American is paying for the tort system," she said, arguing that limits on civil litigation shift costs from businesses onto the people they injure. No AAJ statement on the fourth edition had surfaced by the time of publication.

The main methodological objections from critics are:

• Compensation counted as cost. The total includes payments to injured people. Calling that a "cost" treats a transfer to injury victims the same as a deadweight loss.
• Per-household allocation. Dividing a national total by households assumes full pass-through to consumers. Defendants that self-insure, absorb losses or pass costs to foreign shareholders are treated as if every dollar lands on an American family.
• No counterfactual. The study does not estimate what injured people would otherwise bear through health insurance, public programs or lost income if the claims were never paid.
• Premium-based inputs. Because the estimate leans on insurance data, premium increases driven by investment returns or reinsurance pricing can look like tort-cost growth.

Defenders respond that private settlements are real money, that liability insurance is priced off expected tort payouts, and that the trend line matters more than the level. Both arguments will be heard in committee rooms in 2027.

Where will the new numbers be used next?

Expect the fourth edition in three venues.

State legislatures. Washington State is the clearest near-term example. KUOW reported on November 5, 2026 that the state paid more than $600 million in judgments, settlements and legal costs in fiscal 2026; regional coverage put the total near $614 million, about $537 million in payouts plus roughly $76 million in defense costs, with foster-care claims against the Department of Children, Youth and Families accounting for about $388 million. Lawmakers have already added more than $1 billion to the state's liability account and face a request for $1.3 billion more, and a tort study committee's work is expected to feed proposals when the legislature returns to Olympia. Damages limits for claims against the state are among the options under discussion.

Third-party litigation funding. The per-household number is already a staple of funding disclosure campaigns. At least seven states had funding disclosure rules in force for 2026, and federal proposals to require disclosure of funders in civil cases remain pending. Expect ILR to tie the fourth edition's growth rate to third-party litigation funding in testimony, even though the study itself does not attribute costs to funding.

Courts. The Chamber and its allies cite their own studies in amicus briefs on punitive damages, damages caps, expert admissibility and venue. Plaintiffs' counsel facing a brief that relies on the fourth edition can expect to see the per-household figure presented as context, and will want the methodological objections above ready in response.

What it means for personal injury firms, defense counsel, insurers and funders

Personal injury firms. The fourth edition gives the opposition a fresh, larger number at the start of a legislative cycle. Firms active in Florida-style reform states, and in states whose supreme court lineups shifted in the November 3 elections, should expect damages-cap, fee and anchoring proposals to cite it. The most effective rebuttals in past cycles have been concrete: the share of the total that is compensation to injured residents, and the medical and wage losses that fall on public programs when claims are cut off.

Defense counsel and corporate legal departments. The study is useful context for reserve discussions and board reporting on social inflation, but it is not evidence of any particular claim's value. Briefs that rely on it should acknowledge its source; courts are increasingly alert to advocacy studies presented as neutral data.

Insurers. The fourth edition and the Triple-I series will be cited together in rate filings and regulator meetings. Because the two use different windows and inputs, presenting them as one trend invites challenge.

Litigation funders. Funders should expect the per-household number in disclosure and registration debates, alongside separate industry estimates of funding's cost. The study does not isolate funding as a driver, a distinction funders will want on the record.

Mass tort and MDL counsel. Large aggregate settlements, such as recent product liability and environmental resolutions, flow into the general liability totals that drive the national figure. As settlements concentrate in a few mass torts, a single year's total can swing with one global settlement, a volatility the per-household framing does not capture.

FAQ

What is the Tort Costs in America report?

It is a recurring study by the U.S. Chamber of Commerce Institute for Legal Reform, prepared by the Brattle Group, that estimates the total money paid through the U.S. tort system. The fourth edition, released November 5, 2026, puts the 2025 total at $655.6 billion.

How much do lawsuits cost the average American household?

The Chamber estimates more than $4,900 per household per year, up from $4,207 in the 2022 data. The figure is the national total divided by the number of households, not a measured out-of-pocket expense.

How fast are tort costs growing according to the Chamber?

The fourth edition says 7.8% a year since 2019, about twice the rate of inflation. As a share of GDP, though, costs moved only from 2.1% in 2022 to 2.12% in 2025.

Which state has the highest tort costs per household?

Among states the Chamber has published for the fourth edition, Delaware is highest at $7,814 per household, followed by Connecticut at $6,197 and Florida at $6,149. West Virginia is among the lowest at $2,569.

Did Florida's tort reform work, according to the report?

The report says Florida's tort costs fell from 3.35% to 3.11% of the state economy after the 2023 reforms and the state dropped four places in the per-household ranking, though the Chamber says the effects are only starting to show.

Is the Chamber's tort cost study reliable?

Its figures come from an economic consulting firm using insurance industry data, but it is published by an advocacy group, it counts compensation to injured people as a cost, and the American Association for Justice has disputed its method. It is best read as one side's estimate of the system's size, not an independent measure of waste.