Class Action Lawsuits and Lawyers

Indirect costs include various kinds of real resource costs, such as: The costs of precautions taken by potential injurers, The opportunity costs (forgone value) of goods and services that potential injurers withdraw from the market or do not create because of liability concerns, The opportunity costs of goods and services that consumers do not buy because of liability-induced price increases, and
The disruption costs of layoffs and bankruptcies caused by liability problems.(2)
Indirect costs are not necessarily bad: from the perspective of efficiency, the question is whether they yield benefits larger than the costs.


Evidence About the Costs of the Tort System
The most comprehensive estimates of tort liability costs--which cover only direct costs--come from studies by Tillinghast-Towers Perrin, an actuarial and management consulting firm.(3) Those estimates take advantage of the fact that most tort costs are paid through the insurance industry, in the form of legal costs to defend policyholders, benefits paid to victims and their attorneys on behalf of policyholders, and internal costs for handling claims.
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Attorneys and Legal Information

v. Campbell, 538 U.
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