The Burden of Lawsuit Abuse on Small Businesses
We often hear personal injury lawyers say they are fighting for the “little guy” … but what about those of us who are small business owners, working hard every day to run a business, provide for our families and create jobs? The personal injury bar’s agenda of expanding litigation and creating new ways to sue is a major threat to the livelihood of small businesses and the jobs they provide.
A recent report from the Institute for Legal Reform revealed that in one year alone (2008), small businesses in the U.S. paid $105 billion in lawsuit costs. While small businesses (those will less than $10 million in revenue) paid 81 percent of tort liability costs for businesses, they took in only 22 percent of revenue.
This report cites a Maryland Citizens Against Lawsuit Abuse (MDCALA) survey, released last year with the National Federation for Independent Business - Maryland, which found that 91 percent of small businesses owners surveyed believe that lawsuits filed against businesses have a negative impact on business growth and prosperity in Maryland, with two-thirds (66 percent) responding that the number of liability lawsuits is increasing.
About half of respondents said that a lawsuit or threat of a lawsuit has forced them to increase prices on the goods or services offered and 14 percent said they have even considered closing their business as a result of a lawsuit. Given that small businesses are the key engine of job creation in this country, these results clearly demonstrate how our out-of-control litigation environment increases costs for consumers and threatens our economic recovery.
It is clear that lawsuit abuse is a serious issue that must be addressed. There are important elections taking place in Maryland and in many other states this year. Before going to the polls in November, we encourage all voters in Maryland and elsewhere to ask their candidates where they stand on this issue and what they will do to fight abusive lawsuits that hurt everyday citizens and thwart job creation.
