Ending Lawsuit Abuse: A Key to Lowering Costs for Families and Businesses

Senator David Gowan recently addressed the escalating economic challenges facing Arizona, pointing to rising lawsuit abuse as a critical issue. During his time in the Arizona legislature, he witnessed how a robust economy can uplift families and local enterprises, but he now warns of a “hidden crisis” that is threatening this stability.

Arizonans grapple with significant financial burdens, with tort costs averaging $3,449 per household annually. These costs arise not merely from litigation but also from settlements and attorney fees, exerting pressure on various sectors, including healthcare and local businesses. This environment is increasingly unsustainable.

Statistics highlight the growing legal climate. In fiscal year 2023, Arizona courts saw 1,664,337 civil cases filed, averaging 6,657 cases each working day. While not all are tort-related, the 25.3% increase in filings underscores a broader trend of increased litigiousness. This surge threatens both the business ecosystem and the overall quality of life for residents.

The financial repercussions of this situation are severe. Research from the Perryman Group indicates that the state’s tort costs contribute to over $5 billion in lost personal income and result in the loss of more than 72,000 jobs each year. Small businesses, which form the backbone of Arizona’s economy, face daunting challenges, as the costs of defending against lawsuits can hinder their growth and community investment.

Families are also feeling the pinch. Recent data from Bankrate shows that Arizona’s average annual auto insurance premium is a staggering $2,744, largely driven by the frequency and scale of tort-related claims. This forces drivers to shoulder higher costs just to insure their vehicles, all due to elevated litigation expenses.

The current legal framework disproportionately impacts disadvantaged groups. Those least able to absorb these costs often bear the brunt, facing higher insurance premiums and fewer job opportunities as businesses struggle to cope with the financial strain imposed by frivolous lawsuits.

To address these challenges, reforms are essential. The Arizona legislature is actively pursuing measures like SB1215, which aims to mitigate frivolous lawsuits and implement greater accountability for plaintiffs’ attorneys. These changes are designed to foster a more transparent legal environment while safeguarding families, businesses, and workers across the state.

On a national scale, similar tort reform measures are critical. By limiting excessive litigation and restructuring legal processes, these laws could help lower costs for consumers and businesses alike, protecting them from exploitation within the system.

There is a pressing need to catalyze change. Arizonans must rally to safeguard their future, reduce burdensome costs, and ensure businesses can thrive without being encumbered by endless lawsuits. Senator Gowan emphasizes the responsibility to combat lawsuit abuse for the benefit of all citizens.

Senator David Gowan serves as the Chairman of the Senate Appropriations Committee.