Colorado labeled ‘lawsuit inferno’ amid surge in liability laws

The American Tort Reform Association (ATRA) has designated Colorado as a "Lawsuit Inferno" due to a significant increase in liability legislation and expanded private rights of action. This announcement was made in a report released by the organization.

According to Colorado Politics, ATRA ranked Colorado as one of only two "Lawsuit Inferno" states in its 2025 Legislative HeatMap. This designation indicates the state's aggressive trend toward expanding legal liabilities. The label reflects growing concern over bills that increase opportunities to sue and create new private rights of action, targeting employers, insurers, and manufacturers. The report emphasized that these legislative developments diverge sharply from national trends where other states have shown greater restraint in tort law expansion.

As detailed in the ATRA report and cited by Colorado Politics, lawmakers in Colorado introduced 45 bills in 2025 that either created new private rights of action or expanded existing ones. Of these, 25 were signed into law, significantly increasing the exposure of employers and institutions to litigation risk. The report also notes that Colorado has enacted more such legislation than nearly any other state tracked by ATRA.

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According to a report by the National Federation of Independent Business (NFIB), Colorado's expanded liability climate contributes to what the organization calls a "tort tax" of $7,955 per household annually. This figure is derived from costs related to legal defense, settlements, and insurance premiums. The NFIB argues this cost is disproportionately borne by small businesses and consumers, citing data from the Perryman Group. Additionally, the report warns of an estimated 100,000 jobs lost each year as a result of excessive litigation burdens in the state.

According to ATRA’s official site, it is a nonprofit, nonpartisan organization based in Washington, D.C., advocating for a fairer and more predictable civil justice system. It publishes regular reports including the annual Legislative HeatMap and the Judicial Hellholes report, which aim to highlight states and courts that adopt policies seen as unfavorable to defendants in civil litigation. ATRA works with legal reform coalitions and lawmakers to propose model legislation and analyze the economic and legal impact of tort law trends.