Tort Liability Litigation Costs for Commercial Claims

Posted: 16 Jun 2008

See all articles by Joni Hersch

Joni Hersch

Vanderbilt University - Law School; IZA Institute of Labor Economics; Vanderbilt University - Owen Graduate School of Management; Vanderbilt University - College of Arts and Science - Department of Economics

W. Kip Viscusi

Vanderbilt University - Law School; National Bureau of Economic Research (NBER); Vanderbilt University - Department of Economics; Vanderbilt University - Owen Graduate School of Management; Vanderbilt University - Strategy and Business Economics

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Date Written: Fall 2007

Abstract

This article analyzes tort liability litigation costs using the Texas Department of Insurance Commercial Liability Insurance Closed Claim database for the years 1988–2004. Insurer costs to defend claims in which a suit was filed average $35,000 per claim in 2004$, which corresponds to a share of 0.18 of total expenditures. Claims with higher stakes and complexity lead to greater reliance on outside counsel and less reliance on in-house counsel. Total transactions costs for each dollar received by claimants average $0.75 for all claims and $0.83 for claims in which the claimant retained an attorney and a suit was filed.

Suggested Citation

Hersch, Joni and Viscusi, W. Kip, Tort Liability Litigation Costs for Commercial Claims (Fall 2007). American Law and Economics Review, Vol. 9, Issue 2, pp. 330-369, 2007, Available at SSRN: https://ssrn.com/abstract=1145993 or http://dx.doi.org/10.1093/aler/ahm011

Joni Hersch (Contact Author)

Vanderbilt University - Law School ( email )

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IZA Institute of Labor Economics ( email )

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Vanderbilt University - Owen Graduate School of Management

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Vanderbilt University - College of Arts and Science - Department of Economics

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W. Kip Viscusi

Vanderbilt University - Law School ( email )

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Nashville, TN 37203-1181
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615-322-5953 (Fax)

HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm

National Bureau of Economic Research (NBER)

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Vanderbilt University - Department of Economics

Box 1819 Station B
Nashville, TN 37235
United States
(615) 343-7715 (Phone)
(615) 343-5953 (Fax)

HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm

Vanderbilt University - Owen Graduate School of Management

401 21st Avenue South
Nashville, TN 37203
United States
(615) 343-7715 (Phone)
(615) 343-5953 (Fax)

HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm

Vanderbilt University - Strategy and Business Economics ( email )

Nashville, TN 37203
United States

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