That shocks overall GDP.

Americans’ litigiousness and thirst for massive damages has been a boon to the legal profession. But some researchers and litigation experts warn that the abundance of lawsuits—many of them frivolous—flooding U.S. courts is severely weakening the economy. According to consulting firm Towers Watson, the direct cost of the U.S. tort system in 2009 was approximately $250 billion, which was roughly 2 percent of the gross domestic product. The amount is double the estimated tort expenses in other countries, including the U.K. and Japan. In May, the House Judiciary Committee held a hearing that explored excessive litigation’s effect on the United States’ global competitiveness. During his testimony, Skadden Partner John Beisner explained that plaintiffs counsel engage in five types of litigation abuse that ultimately undermine economic growth: improperly recruiting plaintiffs, importing foreign claims, filing suits that piggyback off government investigations and actions, pursuing aggregate litigation and seeking third-party litigation financing. “America’s litigious nature has caused serious damage to our country’s productivity and innovation. … The root cause is that we have created incentives to sue—and to invest in litigation—instead of establishing disincentives for invoking judicial process unless absolutely necessary. Other countries discourage litigation; we nurture it,” Beisner said at the hearing.