From Illinois Citizens Against Lawsuit Abuse:
Illinois ‘Tort Tax’ Above $2,200 per Illinoisan for First Time Ever
Springfield, IL — Illinois Citizens Against Lawsuit Abuse today highlighted the findings of a new economic analysis by The Perryman Group showing that excessive tort litigation is costing Illinois billions in lost jobs, income, and economic growth.According to the report excessive tort costs in Illinois result in:$15.8 billion in direct annual costs$25.5 billion in lost gross product each year214,039 jobs lost annually$2,004 per person in what researchers describe as a “tort tax”
- $15.8 billion in direct annual costs
- $25.5 billion in lost gross product each year
- 214,039 jobs lost annually
- $2,004 per person in what researchers describe as a “tort tax”
“Third party litigation funding is turning our courts into an investment vehicle,” Melin said. “Outside investors, sometimes including foreign interests, are financing lawsuits against American companies and taking a cut of the proceeds. That drives up insurance costs, increases prices, and ultimately hits working families.”
Illinois lawmakers are currently considering HB5244 to increase transparency in third party litigation funding arrangements.
“Illinois families are paying a lawsuit tax whether they realize it or not,” said Phil Melin, Executive Director of Illinois Citizens Against Lawsuit Abuse. “This new data confirms what homeowners, small businesses, and employers already feel every day. Lawsuit abuse is driving up costs, suppressing jobs, and weakening our state’s competitiveness.”
Melin was in Springfield yesterday co hosting an event with Illinois residents and small business owners who say rising insurance premiums and liability exposure are squeezing their operations and household budgets.
The Perryman findings follow a separate 2026 analysis on third party litigation funding prepared for Citizens Against Lawsuit Abuse. That report found that third party litigation financing imposes:Over $607 per household per year in lost earnings and purchasing powerMore than $31 billion in added inflationary pressureOver $54 billion in lost economic output annuallyAn estimated 454,450 jobs lost each year
“Third party litigation funding is turning our courts into an investment vehicle,” Melin said. “Outside investors, sometimes including foreign interests, are financing lawsuits against American companies and taking a cut of the proceeds. That drives up insurance costs, increases prices, and ultimately hits working families.”
Illinois lawmakers are currently considering HB5244 to increase transparency in third party litigation funding arrangements.
“This is not about denying anyone access to justice,” Melin added. “It is about transparency, accountability, and preventing our legal system from being weaponized as a profit center for hidden investors. If you are going to profit from lawsuits filed in Illinois, you should not be allowed to hide in the shadows.”
Melin previously wrote that Illinois homeowners are “paying the price in terms of 27% higher homeowners insurance rates because of Springfield’s lawsuit addiction.” He noted that states like Florida, which have enacted legal reforms are already seeing measurable insurance relief and improved home insurance rates that make life directly more affordable for the middle class.
“The data is clear,” Melin said. “Reform is a pocketbook issue. Every delay in addressing lawsuit abuse and litigation financing means higher costs for Illinois families and fewer opportunities for economic growth.”
