During National Consumer Protection Week, CALA Highlights the Hidden Consumer Costs of Lawsuit Abuse
FOR IMMEDIATE RELEASE
March 5, 2025
CONTACT:
Victor Gomez
WASHINGTON, DC – As the nation observes National Consumer Protection Week (March 1–7, 2026), Citizens Against Lawsuit Abuse (CALA) is encouraging policymakers and consumers to recognize an often-overlooked threat: the consumer impact of lawsuit abuse.
National Consumer Protection Week, led annually by the Federal Trade Commission, was founded to raise awareness about consumer rights and help Americans identify and avoid harmful practices that threaten household finances. While the conversation is generally dominated by the pervasive threat of scams and fraud, CALA is bringing awareness to how excessive litigation and investor-backed lawsuit schemes impose significant costs on all consumers.
“When Americans imagine threats to consumers, they often think about fraud or identity theft,” said Victor Gomez, Executive Director of Citizens Against Lawsuit Abuse. “But there is another issue quietly siphoning money from all consumers wallets—and many are unaware that it even exists. Lawsuit abuse drives up costs throughout the economy, leaving consumers paying more for everyday goods and services.”
Recent economic analyses underscore the scale of the issue. Research conducted by The Perryman Group examining the impact of excessive tort costs finds that litigation-driven costs continue to ripple across the U.S. economy, raising prices and reducing economic opportunity.
According to the analysis:
$397.2 billion in annual direct tort costs are imposed on the U.S. economy
$602.3 billion in lost economic output occurs each year due to excessive litigation costs
More than 5.05 million jobs are lost nationwide
These costs translate into a hidden “tort tax” of $1,771 per person or $5,579 per family annually
Additional research examining third-party litigation financing (TPLF)—a practice in which institutional or foreign investors fund lawsuits in exchange for a share of potential payouts—shows how profit-driven litigation can further increase costs for consumers.
That analysis finds that investor-backed litigation contributes to:
More than $31 billion in inflationary pressure across the economy
Over $54 billion in lost economic output annually
Approximately 454,450 jobs lost eachyear
Over $607 per household in lost earnings and reduced purchasing power
“These findings reinforce an important point during National Consumer Protection Week,” Gomez said. “When the legal system becomes a vehicle for excessive litigation or outside investors seeking profit, the costs don’t stay in the courtroom. They show up in higher insurance premiums, higher prices, and fewer opportunities for workers.
CALA continues to emphasize that America’s civil justice system plays a vital role in resolving disputes and ensuring accountability when individuals are legitimately harmed. However, when the system becomes unbalanced by excessive lawsuits or outside financial incentives, the economic consequences can reach far beyond individual cases.
During National Consumer Protection Week, CALA is encouraging policymakers and community leaders to consider the broader impact of lawsuit abuse on affordability and economic stability.
To get the full scope of consumer protection, protecting families from hidden costs that reduce their purchasing power must be a part of the conversation. A fair and balanced civil justice system is essential not only for justice, but also for protecting the economic well-being of American consumers.
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About Citizens Against Lawsuit Abuse (CALA)
Citizens Against Lawsuit Abuse (CALA) is a nonpartisan, grassroots movement working to end rampant lawsuit abuse across the United States. CALA advocates for commonsense legal reform measures by educating the public about the devastating, real-world costs of lawsuit abuse on working families and small businesses.
About The Perryman Group (TPG)
An economic and financial analysis firm, The Perryman Group (TPG), provides clients with well-documented, carefully considered answers to even the most complex questions. For more than 30 years, The Perryman Group has met the challenges of thousands of clients through a systematic approach and a level of performance that assures a consistent standard of excellence. The firm has been involved in scores of major events shaping the economic landscape, from crucial corporate locations to landmark legislation to important regulatory policies to notable judicial decisions.