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U.S. tort costs dropped last year compared with the prior year for the first time since 1997, declining 5.5 percent to $247 billion, according to a report from Towers Perrin, a global consulting firm. “In 2006, the modest decline in personal tort costs was combined with a significant drop on the commercial side,” Russ Sutter, Towers Perrin principal, said in a press release. Commercial tort costs, including legal, settlement, award and administrative expense, decreased 7.7 percent to $159.6 billion, while personal tort costs declined 1.2 percent to $87.4 billion, the report said. Over the last 20 years, the ratio of tort costs to U.S. gross domestic product has stayed at about 2 percent, but fell below that percentage last year for the first time in six years. In the prior report for 2005, total costs rose about a half percent over 2004 to $261.4 billion. The firm expects the costs to start to rise again in 2007, partly because of the current subprime loan crisis, Sutter said in the release.

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