Several factors, including a drop in gross domestic product, played a role in pushing U.S. tort costs down 2.7%—or about $6.8 billion—in 2009, according to a study released Wednesday by Towers Watson & Co.

According to the “2010 Update on U.S. Tort Cost Trends,” the U.S. tort system cost $248.1 billion in 2009. In addition to the drop in GDP, the report attributed the decline to a rising unemployment rate and decreasing tort activity as a result of a lower level of economic activity.

In contrast, U.S. tort costs reached $254.7 billion in 2008, according to an update issued in December 2009.

The Towers Watson study’s methodology incorporates three cost components: benefits paid or expected to be paid to third parties, defense costs, and administrative expenses. Administrative expenses are identified separately in the report.

“While Towers Watson outlines why these are a real cost of the tort system, it takes no position on the efficiency of the insurance industry’s administrative expenses,” said Towers Watson in a statement accompanying release of the report.

The study also does not include costs incurred by federal and state court systems in administering actual suits in the report. Certain indirect costs, such as those associated with litigation avoidance, also are omitted.

Towers Watson found that the 2009 decline was most pronounced in commercial tort costs, as total tort costs from commercial lines decreased 5% from 2008 to 2009.

“At $152.7 billion, 2009 commercial tort costs were 11.9% lower than average commercial tort costs in the peak years 2004 and 2005,” according to the report. The drop in commercial tort costs offset modest gains in personal tort costs—torts alleged against individuals, excluding medical malpractice—which increased slightly from $94.2 billion in 2008 to $95.4 billion in 2009, said Towers Watson.

“The lack of a robust economy contributed to a decrease in the opportunity for tort actions,” said Russ Sutter, Towers Watson consultant and author of the report, in the statement. “This decline was most notable in the commercial auto line of business—perhaps the most economically sensitive coverage with a tort component—as insured commercial auto tort costs fell by 7.4% in 2009.”

The costs of directors and officers liability litigation in 2009 largely related to the credit crisis of 2008 also were lower than Towers Watson had expected.

“Looking ahead to 2010, Towers Watson is forecasting a 9% increase in tort cost, primarily due to the BP Deepwater Horizon disaster in the Gulf of Mexico,” said Towers Watson. “Excluding the Gulf spill, however, Towers Watson estimates tort costs in 2010 to be fairly stable, perhaps up 2%.”

The full report is available at www.towerswatson.com.