The costs attached to litigation are relatively well documented. The particulars with respect to the costs, such as their magnitude, and the sector(s) they affect are less well known. Of particular interest is the magnitude of litigation costs that fall on small business. There were 22.4 million small businesses in the United States in 2001 (Office of Advocacy, SBA). Of those, a considerable 72.6 percent or 16.3 million can be safely viewed as sole proprietorships (Economic Census, 1997). The majority, if not the totality of sole proprietorships is small. What are their litigation costs? Case studies could be used to reiterate the data findings. A White House study, Who Pays for Tort Liability Claims? An Economic Analysis of the U.S. Tort Liability System, April 2002, actually equates tort claims to a tax on individuals and businesses. Citing a study by Tillinghast-Towers Perrin (U.S. Tort Costs: 2000, Trends and Findings on the Costs of the U.S. Tort System, Feb. 2002), the report suggests that the U.S. tort system cost $179 billion in 2000. That figure most likely understates the true estimate of costs for at least two reasons: (a) it cannot include the many externalities attached to such disbursements, and (b) more important, tort costs are a subset of litigation costs.

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