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When the Left cites some "study" that purports to "show" some particular policy outcome pointing in a direction it already endorses -- always with dollar values attached that are both enormous and seemingly precise -- I'm skeptical. So to be fair, I'll be skeptical of this new "study" that purports to "show" something on a subject I endorse -- tort reform. No mention here of possible benefits of litigation (think of it as libertaran extra-governmental law enforcement), but lots and lots of costs. Lawrence J. McQuillan and Hovannes Abramyn of the Pacific Research Instute, writing in this morning's Journal:

Based on our estimates, and applying the best available scholarly research, we believe America's tort system imposes a total cost on the U.S. economy of $865 billion per year. This constitutes an annual "tort tax" of $9,827 on a family of four. It is equivalent to the total annual output of all six New England states, or the yearly sales of the entire U.S. restaurant industry.

How does the legal system extract such an astounding amount from our economy? We applied the rent-seeking theory of transfers from economic science to pick up where past studies -- including the highly regarded Tillinghast-Towers Perrin study -- leave off. We began by examining the static costs of litigation -- including annual damage awards, plaintiff attorneys' fees, defense costs, administrative costs and deadweight costs from torts such as product liability cases, medical malpractice litigation and class action lawsuits.

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