Impact Study Released
Justice Reform Would Save Millions, Create Thousands of Jobs
May 28 - Thousands of jobs and billions of dollars in new wages
would be created in Massachusetts if the state legislature enacted
a civil justice reform bill currently pending in the legislature's
Joint Committee on the Judiciary, according to a study on the economic
impact of civil justice reform released today by Suffolk University's
Beacon Hill Institute. This is because taxpayers would save millions
of dollars in hidden "litigation taxes" every year if
the bill passes.
the last half century, there has been an explosion of tort costs,"
said David Tuerck, Executive Director of the Beacon Hill Institute
and Chair of Suffolk University's Economics Department. "These
rising costs decrease competitiveness, destroy jobs, and increase
the burden on taxpayers." The study found that tort costs have
become a "tax" that penalizes consumers and discourages
businesses from creating new jobs and investing in growth.
study, Taxation by Litigation, estimates that if the legislature
enacted common sense civil justice reforms statewide, the new law
to 241,224 new jobs
billion to $8.2 billion in new wages
billion to $31.9 billion in new capital
million to $488 million in new tax revenues.
this study, we found that tort suits are creating a chilling effect
on the business community," Tuerck continued. "Everyone
in the state is paying an indirect 'tort tax' because of this tort
system, which is hurting our economy. What we end up with is an
expensive lottery that operates to the disadvantage of the vast
majority of Massachusetts residents, virtually doubling the effective
tax on earned income." Tuerck added that "We are not advocating
doing away with the system, but returning to its traditional moorings.
We simply recommend bringing the tort system under control."
Bill 896, the focus of the study, would curb abuses of the system
and reduce the high costs of litigation borne by Massachusetts taxpayers.
Among the bill's provisions are those that would:
plaintiffs under the influence of alcohol or drugs at the time
of their injuries to prove by clear and convincing evidence that
the influence of alcohol or drugs did not help to cause the harm.
claims against registered professionals, require plaintiffs to
submit an affidavit by a Massachusetts licensed professional stating
the claim has merit.
joint and several liability for damages unless the tortious conduct
was knowingly undertaken. Under this provision, defendants would
only be held liable for that percentage of the harm which they
the tools courts have to impose sanctions on attorneys and parties
for filing frivolous suits or offering meritless defenses.
product liability law by enacting a fifteen-year statute of repose
for product liability claims and incorporating a "state of
the art" defense, holding parties only to existing knowledge
the statute of limitations on "slip and fall" cases
from three years to one.
noted that while it would be undesirable as well as impossible to
eliminate tort costs entirely, passage of the bill would vastly
improve matters and stimulate further economic development. "Passing
this bill would be an important step in the right direction,"
01/23/2007 5:08 PM