The growth of U.S. civil litigation costs slowed considerably in2005, according to a study published today.

The Tillinghast business of Towers Perrin reported that U.S.tort costs totaled $261 billion in 2005, representing only a .5percent rise from the previous year.

That figure compares to a 5.7 percent rise in 2004 and a 5.5percent rise in 2003.

Tillinghast Principal Russ Sutter said it was difficult tomeasure the impact of tort reform measures on litigation costs.

"What has certainly had an impact on tort cost trends has beenthe decades plus decline in auto accident frequency, as the basicauto accident is the largest single portion of U.S. tort costs," hesaid.

Asbestos costs continue to be less of a factor in overallcommercial tort costs. While insured asbestos losses expanded anadditional $7 billion in 2005, the total cost was lower than thecomparable increases in 2002, 2003 and 2004. "As the growth ofasbestos-related tort costs has continued to drop over the pastcouple of years, so has the growth of commercial tort costsoverall," Mr. Sutter said.

The report forecast growing tort costs in the next couple ofyears, seeing a 3.5 percent rise next year and 4.5 percent thefollowing two years.

Among the factors affecting the increase will be any impact fromthe rise in stockholder suits against directors and officers overbackdating of options and the impact of class action litigationpassed by Congress in 2005.

However, Morgan Stanley property-casualty analyst William Wiltin a recent report found evidence from other surveys indicatingthat insurers face more litigation.

He cited a study conducted by the national law firm of Fulbrightand Jaworski that noted the number of companies reporting more than50 lawsuits commencing during the past year was up 23 percentversus 11 percent a year earlier.

As for any impact from the federal class action reform law of2005, the survey noted three-fourths of executives said it had nomeaningful impact on their corporations.

This article originally appeared in The National UnderwriterP&C. For the complete article, please click here.

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