Earlier this week, the American Tort Reform Association released its 2010-11 Judicial Hellholes Report – and it was no surprise that several California cities once again have the dubious honor of being listed among America’s worst areas for civil litigation. From lawsuits claiming that extra virgin olive oil was “extra virgin enough” to one litigant filing more than 1,000 Americans with Disabilities (ADA) access lawsuits since 2003, California continues to be a haven for those who want to take advantage of the system to make a quick buck.
Lawsuit abuse hurts California’s economy and burdens consumers. The threat of abusive lawsuits increases the cost of doing business and raises prices across the state. California small businesses are preyed upon more frequently than other businesses for the simple reason that they do not have the resources to fight these types of lawsuits. When surveyed in 2008, three quarters of NFIB member small businesses felt threatened by frivolous lawsuits and, if sued, would consider closing their doors forever.
Small businesses are the heart of California’s economy, but they constantly face the threat of lawsuits. This form of litigation has a very real impact: more than 2 in 3 small businesses report that litigation threats lead to increased costs of doing business, higher prices, fewer products and services and limited business growth.
Case in point: NFIB’s Small Business Legal Center recently joined a coalition of business groups in support of a small business owner who after successfully defending his business in an ADA lawsuit at a personal cost of more than $100,000 now has to go back to court to fight for the lawfully awarded attorney’s fees. If we cannot hold those who frivolously sue small businesses accountable for the damage they do, then how can we protect our job creators from those who prey upon the life’s work of others.
With fifty new faces in the California legislature and a new Governor coming in this January, NFIB urges our elected leaders to protect small business owners from the threat of abusive lawsuits by passing new liability reforms. More than 4 in 5 small business owners believe the number of lawsuits is increasing. More can and should be done to protect them from abusive lawsuits.
Nearly 95% of small business owners believe that current law favors those who sue; only 4% believe the law balances the interests between those who sue others and those who are sued.
If small business owners had greater protection against abusive lawsuits, many of them could expand their businesses. Nearly 80% could increase their offerings to customers, and 2 in 3 could hire more employees. With the California economy faltering – shouldn’t we be giving small employers in our state a leg up in creating jobs instead of making it more difficult?