Businesses Deploy RICO Claims to Combat Alleged Litigation Fraud and Rising Tort Costs

Companies and insurers have begun using the Racketeer Influenced and Corrupt Organizations Act to sue alleged fraud rings they say manipulate the civil litigation system. A recent report from the American Tort Reform Association counts almost 300 RICO filings since 2024, targeting law firms, litigation financiers and medical providers. Critics such as Phil Melin argue that this abuse generates a $2,000 annual tort tax for Illinois residents, inflating car, property and other insurance premiums.

The report also flags asbestos cases where plaintiffs were allegedly coached to provide false testimony, noting that courts have dismissed about 96% of more than 400 suits against a single manufacturer. Illinois counties rank high on the American Tort Reform Foundation’s Judicial Hellholes list, while Florida’s insurance rates fell after the state implemented tort reforms. The RICO cases remain unresolved, and officials hope Illinois courts will scrutinize them more closely.