WASHINGTON, D.C. — David A. Sampson, president and CEO of the American Property Casualty Insurance Association, issued the following statement in response to the Consumer Federation of America’s (CFA) and Center for Justice & Democracy’s (CJ&D) document, “How the Cash-Rich Insurance Industry Fakes Crises and Invents Social Inflation.”

“The CFA and CJ&D report is methodologically flawed.  It is little more than a rehashed amalgam of the authors’ opinions, accusations, and news articles masquerading as analytics,” said Sampson.

“This fictional work is directly at odds with what we know.  Social inflation is real and rampant, and burdening every household with thousands of dollars in additional costs each year.” 

Setting the Record Straight

• Median jury awards for personal injury lawsuits have more than tripled in just the last 8 years, with no relief in sight.^[1]

• The number of mega/nuclear verdicts, defined as jury awards over $5 million, has grown by well over 50 percent since 2011.^[2]

• Third party ligation financing is surging, with more than $9 billion of capital invested in the U.S. alone.^[3] Even the Harvard Endowment has invested more than $500 million to finance third party litigation.^[4]

• Plaintiff attorney involvement is increasing, and one merely needs to glance at the television to see the depth and breadth of their advertising. Plaintiff lawyer drug-injury advertisements on television, radio, and social media have increased by more than 60 percent since 2008, putting patients’ lives at risk across the U.S.^[5] Their sensationalized, misleading claims are causing patients to discontinue their medical treatments without consulting their physicians.

“It is troubling that the CFA and its allies in the plaintiffs’ bar would try to manipulate policymakers into ignoring factual cost increases that harm consumers.  Moreover, it is ironic that they claim that “social inflation” is an industry invention when, based on the facts, it is a product of plaintiff’s bar lawsuit abuse.

“The hard proof of social inflation isn’t difficult to find.  The “tort tax,” what all businesses and individuals bear for this runaway litigation “market,” is on the rise and currently exceeds $3,300 per household nationally, with costs in many problem states well above that figure.[6]

“APCIA continues to advocate for more meaningful civil justice reform across the country to reduce consumer and business costs and restore balance to the civil justice system.