Colorado Residents Face $1,982 Annual ‘Tort Tax’ as Legal Climate Worsens, Jobs at Risk

JULY 29, 2025 (WASHINGTON) — Today, the American Tort Reform Association named Colorado a “Lawsuit Inferno” for the second consecutive year in its latest Legislative HeatCheck report after state lawmakers pursued dozens of liability-expanding bills.

“Colorado lawmakers seem hell-bent on making it easier and more lucrative to sue, while doing little to help the people who actually drive their state’s economy,” said Tiger Joyce, president of ATRA. “The sheer volume of liability-expanding bills introduced this year is staggering.”

Legislation

Colorado lawmakers introduced 45 bills that created new private lawsuits or expanded liability under existing laws this year. More than half of those became law, according to the Colorado Civil Justice League.

Among the most concerning new laws, ATRA’s report calls out:

• More Ways to Sue and Larger Damages Under the Anti-Discrimination Act: This law creates new avenues for lawsuits and increases the damages that can be awarded under the state’s anti-discrimination law to $50,0000 per claim. By expanding damages and making it easier to sue, ATRA warns that H.B. 1239 will likely encourage lawsuit abuse and burden small businesses, all while doing little to improve accessibility for people with disabilities. It was sponsored by Democratic Reps. Yara Zokaie and Andrew Boesenecker and Sens. Lindsay Daugherty and Mike Weissman.
• More Wage-Related Litigation: This sweeping change expands who can be sued under wage and hour laws — including individual business owners with as little as a 25% stake in a company. Employees can now sue for emotional distress and other noneconomic damages, while employers face new hurdles in recovering legal fees from frivolous lawsuits. Small and family-owned businesses could be hit hardest, facing higher legal costs and increased risk of meritless claims. H.B. 1001 was sponsored by Democratic Reps. Monica Duran and Meg Froelich and Sens. Jessie Danielson and Chris Kolker.

“Every dollar spent fighting meritless lawsuits is a dollar not spent on hiring, innovation, or serving customers,” Joyce said. “Colorado’s small businesses are being squeezed from every direction, and families ultimately pay the price through higher costs and fewer job opportunities.”

The Legislative HeatCheck report also highlights a bill vetoed by Gov. Jared Polis that would have expanded liability for rideshare companies, two other lawsuit expansion bills that the Senate blocked, and two minor reforms.

Economic Squeeze on Colorado Families and Businesses

The consequences of expanding opportunities to sue and the quantity and types of damages that can be collected are not just theoretical. Colorado residents pay the 7th-most expensive “tort tax” in the country at $1,982 per person annually — that’s nearly $8,000 every year for a family of four. Excessive tort costs in Colorado also lead to nearly 100,000 jobs lost in the state per year.

“Colorado’s reputation as a magnet for lawsuits is driving away jobs and investment,” Joyce said. “It’s time for lawmakers to realize that these actions, in the long run, will harm small businesses, workers and families. Communities deserve a fair, balanced legal system — not one that puts their livelihoods at risk and rewards lawsuit abuse.”

ATRA’s Legislative HeatCheck report evaluates a select group of states’ progress — or lack thereof — in enacting meaningful tort reform measures during their most recent legislative sessions.

Colorado lawmakers join the Florida House of Representatives, West Virginia’s Senate Judiciary Committee, and the state legislatures of Illinois, New York and Virginia as 2025 “Lawsuit Infernos.” The full Legislative HeatCheck report is available at heatcheck.atra.org.

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About the Legislative HeatCheck: The Legislative HeatCheck is an annual analysis, started in 2024 by the American Tort Reform Association, that assesses which states are making strides to improve their civil justice systems through tort reform and which states remain in dire need of legal reform. The report categorizes a select group of states into three groups:

• Tort Reform Trailblazers: States that have recently enacted key tort reform measures to rein in lawsuit abuse and improve their legal climates.
• Lawsuit Infernos: States whose legislatures are actively expanding liability and worsening their civil justice systems or failed to pass any meaningful legal reforms during their latest legislative sessions, leaving their civil justice systems mired in a litigious status quo.
• Heat Watch: States whose legislatures still are in session and are considering either positive or negative legislation. These states are placed on “Heat Watch” due to inaction on tort reform or the potential for liability-expanding legislation that could worsen their legal climates.

The Legislative HeatCheck provides an overview of tort reform battles waged in statehouses nationwide and serves as a guide for where reform efforts should be focused in the year ahead.

About the American Tort Reform Association: Founded in 1986, ATRA is a nonpartisan, nonprofit organization and is the nation’s first organization dedicated exclusively to reforming the civil justice system through education and legislative enactment. ATRA acts as a nationwide network of state-based liability reform coalitions backed by 154,000 grassroots supporters. ATRA works to bring greater fairness, predictability and efficiency to America’s civil justice system. Those efforts have resulted in the enactment of state and federal laws that make the system fairer for everyone.