Liability claims costs in the U.S. are soaring far beyond economic fundamentals, driven by legal system abuse, third-party litigation funding (TPLF), changing juror sentiment and shifts in societal norms, according to a study published by Swiss Re.
The big picture: The analysis highlighted how emotion-driven jury awards and increased litigation are fueling higher insurance premiums and costs for businesses and consumers.
- Swiss Re’s study pointed to a self-reinforcing cycle where litigation has become a social norm, with jurors awarding high damages based on injury severity rather than company size.
- The growing influence of TPLF and demographic shifts among jurors are compounding the trend, making liability costs less predictable and more burdensome for insurers.
- The report underscored a strong case for targeted legislative tort reform to curb escalation of legal system abuse, driven by billboard attorneys and dark money investors fueling lawsuits, but signals little relief ahead for the liability market.
What they’re saying: “We’re seeing growing strain on the civil justice system, with more lawsuits yielding damages that often outpace the actual harm. Jury awards in the tens of millions are becoming more frequent, shaped by emotion, not just evidence. This trend isn’t limited to large corporations. Small and mid-sized businesses face similar outcomes when serious injuries are involved,” said Monica Ningen, CEO, Property & Casualty Reinsurance US, Swiss Re.
- Ningen added, “These rising liability costs don’t stay in the courtroom. They contribute to higher insurance premiums, reduced coverage availability and increased costs for everyday goods and services. The growing role of third-party litigation funding adds another layer of pressure, often prolonging cases and inflating awards.”
Go deeper: Read Triple-I’s Legal System Abuse Issues Brief (members only).
- Visit Triple-I’s legal system abuse and social inflation knowledge hub.