David Williams, president of the Taxpayers Protection Alliance (TPA), said that mass tort litigation "drains capital" that could be used for "economic growth, business expansion, and job creation." Williams made this assertion in a DC Journal op-ed on January 3.
"Mass tort litigation too often fails to fairly compensate victims," said Williams. "The mass tort suits promoted by profit-motivated legal firms and financed by outside investors extract money from the general economy."
According to data from the Administrative Office of the U.S. Courts, as of the end of fiscal year 2023, Multidistrict Litigations (MDLs) accounted for 71.3% of the federal civil caseload, representing 417,137 cases out of 584,986. Lawyers for Civil Justice (LCJ) has called for reforms to Rule 16.1 to address claim insufficiency in MDLs.
The U.S. Government Accountability Office (GAO) reports on the financial impact of third-party litigation financing (TPLF), which has developed into a multi-billion-dollar industry. Funders provide capital to plaintiffs or law firms in exchange for a share of potential recoveries, often extending litigation and escalating costs, ultimately burdening businesses and the economy.
Munich Re reported that excessive tort costs alone reduce U.S. economic output by an estimated $429.35 billion annually, translating to a "tort tax" of more than $1,300 per person. This financial strain hampers economic growth and affects consumers, highlighting the need for legal system reforms to address these inefficiencies.
According to the Insurance Information Institute (Triple-I), TPLF also inflates costs for insurers by prolonging litigation and increasing claims expenses. These expenses are often passed on to policyholders in the form of higher premiums, further stressing household budgets.
Williams is the President of the Taxpayers Protection Alliance, a nonprofit focused on exposing government waste and advocating for taxpayer-friendly policies. With over 30 years of experience, he has been instrumental in raising awareness about how legal and regulatory reforms can stimulate economic productivity and fairness.
