As trucking companies grapple with higher legal expenses due to staged accidents and significant settlements, Americans may be unknowingly bearing a “litigation tax.” This could manifest as increased insurance costs and elevated prices for everyday items.
Industry observers and those critical of excessive litigation assert that the financial burden from baseless lawsuits and escalating settlements is indirectly affecting consumers. This situation appears especially detrimental to the trucking sector, where escalating commercial insurance rates might ultimately contribute to higher freight charges, grocery prices, and personal auto insurance premiums.
Henry Hanscom, who holds a pivotal role at the American Trucking Associations (ATA), stated, “Litigation abuse is not just impacting trucking; it’s raising costs for consumers, harming small businesses, and threatening public safety.”
Congress Watching Closely
A study indicates that lawsuits related to tractor-trailer incidents have been on the rise, increasing at 3.7% annually from 2014 to 2023. This coincides with a projected 2.5% growth in the personal injury market through 2025.
Since early 2020, car insurance premiums have surged, with reports suggesting a 55% increase.
The Surface Transportation Reauthorization Act is set to expire in September and is crucial for federal transportation funding and policies. The ATA advocates for various measures to address litigation abuses to be included in this bill, though it remains uncertain if these reforms will make it into the final legislation.
Members of the trucking community, including ATA Chairman Greg Hodgen, have engaged with the House and Senate Judiciary Committees to discuss abuses such as staged crashes and frivolous lawsuits. House Judiciary Committee Chairman Jim Jordan expressed concern over the alarming rise in staged accidents, which reportedly adds around $4,200 to the yearly expenses of an average household.
A spokesperson from Jordan’s office confirmed ongoing investigations into these issues.
Consumer Repercussions
In October 2025, Georgia Congressman Mike Collins introduced the Litigation Abuse Reduction Act aimed at curbing frivolous lawsuits by mandating sanctions against attorneys who file such cases in federal court. This bill seeks to abolish the 21-day period that allows lawyers to withdraw baseless claims without penalties.
This measure has garnered backing from the U.S. Chamber of Commerce and is currently under review by the House Judiciary Committee.
A similar initiative was introduced back in 2017 but ultimately failed in the Senate after passing the House. It faced significant opposition, notably from the American Bar Association, which invested over $7 million in lobbying efforts that year.
Recently, Congress introduced the Fair Trucking Act, designed to combat “nuclear verdicts” that can surpass $10 million, potentially driving freight companies into bankruptcy. A significant percentage of trucking-related judgments reportedly exceed $1 million.
The AAJ has actively campaigned against the Fair Trucking Act, reflecting the broader tension between plaintiff advocacy and the interests of trucking companies and insurers.
Heather Sager from AAJ highlighted that the insurance industry accumulated $169 billion in profits in 2024 while simultaneously denying claims. She noted that insurers often attempt to shift blame onto those holding them accountable.
Litigation risks are negatively influencing the transportation insurance landscape, especially as settlements can easily exceed millions. Reports suggest that some trucking companies faced premium hikes of 20-30% within just one year.
In a recent ruling, the Supreme Court opted not to limit liability for freight forwarders, which relates to whether brokers can be held responsible under state laws for hiring unsafe motor carriers. This decision raises concerns about an inconsistent patchwork of liability rules, which could inflate costs throughout the supply chain.
Hanscom remarked that the spiraling litigation costs are translating into increased commercial auto insurance premiums across the trucking sector, with liability premiums surging by 18.6% from 2021 to 2024, despite a decline in heavy-duty truck accident rates.
With trucking responsible for transporting about 70% of goods across the U.S., any hike in cargo insurance costs is likely to be passed down to consumers. Lawsuits related to trucking are anticipated to provoke further food price inflation over the coming decade, as per the U.S. Chamber of Commerce’s Law Reform Institute.
Additionally, proposals are being discussed regarding sanctions for staged highway accidents and other litigation abuses.
In 2023, Florida’s Governor Ron DeSantis signed HB837 to counter frivolous lawsuits by adjusting negligence standards, targeting high insurance premiums. The immediate impact was evident, with average premiums dropping by 6.5% across major insurance groups.
As insurance costs rise nationally, states like New York, which currently has some of the highest rates in the U.S., are exploring similar reforms to combat the issue.
New York Governor Kathy Hochul emphasized a need for tort law reform to shield compliant individuals while preventing abuse in the personal injury system, drawing attention to the potential for intentional accidents resulting in substantial awards.
This is a continuing narrative. Companies often seek to deflect responsibility for their treatment of consumers, all while searching for legal changes that protect them—rather than those adversely affected by their actions.
