The economic consequences of such heavy tort costs are considerable. First, individuals suffer directly by having less disposable income than they would otherwise due to higher premiums for automobile and other forms of insurance. Second, individuals suffer indirectly when businesses, forced to pay higher premiums for product liability and other forms of insurance, raise their prices on goods and services. Third, when businesses have to charge higher prices, they do less business than they would otherwise, which in turn slows down job expansion and economic growth. Individuals bear the brunt of this economic slowdown in the form of lower wages and fewer jobs. Finally, increasing litigiousness discourages businesses and individuals from taking risks, which means that fewer new products are brought to market and new technologies are either delayed or forgone altogether.[2]

      Individuals living and working in urban areas are particularly affected by the high costs of the tort system, because cities and other densely-populated areas have experienced an even greater increase in the tort costs. In New York City, for instance, municipal litigation costs increased 187 percent between 1984 and 1994, and such costs are increasing at a 12 percent annual rate thus far in the 1990s.[3] In addition, municipal residents pay relatively more in auto insurance and other tort-related costs, thereby adding to the economic burdens of urban residents. In the current environment of fiscal responsibility and taxpayer flight from cities, urban governments and residents can ill-afford to allocate large portions of their budgets to litigation costs.