The exponential growth of liability claims costs and social inflation in the United States, in part, is being driven by changing juror sentiment and shifts in societal norms, according to analysis from Swiss Re.
“Liability claims costs in the United States have entered a self-reinforcing spiral. Traditional economic drivers such as wage inflation, medical-cost trends and CPI growth no longer explain the pace at which liability claims are escalating,” said an article published by Swiss Re, titled “Verdicts on trial: The behavioral science behind America’s skyrocketing legal payouts.”
“This growing gap between economic fundamentals and actual claims experience has been termed ‘social inflation,’ which is in large part driven by legal system abuse,” the article explained.
Read more: US Nuclear Verdicts Break Records and Drive Social Inflation to 7% in 2023: Report
In its 2025 Behavioral Social Inflation Study, Swiss Re aimed to assess the behavioral reasons behind legal system abuse, which was based on a nationally representative survey of 1,150 U.S. adults, who were presented with a series of randomized legal simulations.
“The findings confirm that juror sentiment has shifted decisively toward plaintiffs, and this shift is influencing verdicts in measurable ways,” said the article, which laid out the findings of the study.
“Crucially, the effect is not confined to Fortune 500 companies. In cases involving severe injury, jurors are nearly as likely to recommend high compensation against small and medium-sized enterprises (SMEs) as they are against large corporations,” the article added.
“We’re seeing growing strain on the civil justice system, with more lawsuits yielding damages that often outpace the actual harm. Jury awards in the tens of millions are becoming more frequent, shaped by emotion, not just evidence,” said Monica Ningen, CEO P&C Reinsurance US, Swiss Re, in a statement accompanying the report.
“These rising liability costs don’t stay in the courtroom. They contribute to higher insurance premiums, reduced coverage availability, and increased costs for everyday goods and services,” she emphasized.
“The growing role of third-party litigation funding adds another layer of pressure, often prolonging cases and inflating awards. Given the magnitude of these costs, businesses must pass these pressures along the value chain, and ultimately, consumers bear the impact,” Ningen said.