Civil justice tort system costs Minnesota households $2,615 per year
All Minnesotans are impacted by the rising costs of the state’s unfair civil justice tort system. These costs are built into the price Minnesotans pay for all the goods and services they buy. It also impacts investment decisions and our state’s overall business climate.
A recent study found:
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Each Minnesota family pays a “lawsuit tax” of more than $2,600 per year because of the unfair civil justice system in the state. This is about 1.5% of the state’s Gross Domestic Product.
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Tort costs greatly outpaced inflation and GDP growth. From 2016-2020 tort costs in the
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U.S. rose about 6% per year, far higher than the then rate of inflation (1.9%) and GDPGrowth (2.8%) during that timeframe. Source: Tort Costs in America, 2022 by U.S.Chamber Institute for Legal Reform.
Litigation risk, exposure and costs are rising in Minnesota
Minnesota ranked 20th in the U.S. in a recent survey on the fairness and reasonableness of a state’s liability system - a drop of 16 spots from the previous year’s survey where MN ranked 4th best in the nation. Almost 90% of businesses reported that a state’s litigation environment is likely to impact important business decisions at their company. Source: U.S. Chamber Institute for Legal Reform, 2019 Lawsuit Climate Survey.
Many troubling new laws passed and signed into law in the 2023 Minnesota Legislative Session will dramatically increase litigation risk, cost and exposure for consumers and employers. These law changes include:
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Passage of many new private rights of action
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Erosion of the longstanding American Rule in the U.S. justice system where each side in a legal matter must pay their own attorney’s fees
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Expansion of the state’s Consumer Fraud Statutes with undefined terms that will lead to lengthy needless litigation and could open the door to many more frivolous lawsuits
Jury awards are also showing a troubling trend – for example, one jury granted a $111 million verdict against a St. Cloud business for leg surgery that unfortunately led to a permanent disability. With contingency fees earning as much as 40%, excessively large verdicts give personal injury lawyers a huge windfall at everyone else’s expense. Reasonable people would agree any guilty defendant should be responsible for injuries they inflicted but some verdicts and dollars awarded defy logic. These greatly add to the litigation costs that ultimately fall on consumers, employers and taxpayers.
