NewsFlash: Tuesday, November 21, 2006
Legal awards have little impact on economy
With Treasury Secretary Henry M. Paulson calling for looser corporate regulation Monday, the Bush administration may be gearing up again to change the legal system to make it harder for injured parties to win compensation through the courts. Insurance industry proponents of these changes have claimed that the tort law system creates economic harm by stifling job growth, research and development spending, profitability and productivity, and by raising health care costs – claims based largely on reports issued by industry consultants.
However, a new report issued today by the Economic Policy Institute, Tort Costs and the Economy, shows that these claims are not supported by the facts and that the industry-favored “reforms” could actually do more harm than good. This analysis, by EPI Vice President and Policy Director Ross Eisenbrey, disputes claims by the 2004 Economic Report of the President that tort liability hurt the economy in several different ways and uses data from the insurance industry’s own consultant, Towers Perrin, and Moody’s Economy.com to test each claim made about tort liability.
Click here for the release, which contains links to the report.