As I travel around California visiting with our many small business members, these mom and pop employers have told me almost every story of lawsuit abuse imaginable: customers pretending to slip and fall in order to sue a business, lawsuits over the blue paint on a parking space being faded, businesses facing Prop. 65 lawsuits for not warning customers that alcohol is bad for them…the list goes on and on.
That’s why our organization, the National Federation of Independent Business/California, is pleased to join with Citizens Against Lawsuit Abuse (CALA) in recognizing Lawsuit Abuse Awareness Week (LAAW), which runs from October 7 through October 11. Every day this week, CALA will post a new video on its YouTube channel of a business owner who has faced a legitimate, tragic, frivolous lawsuit, reminding us of the real cost of lawsuit abuse on their small business. But make no mistake – when it comes to lawsuit abuse, we all pay.
When a small business owner faces an abusive lawsuit, they have two choices – settle or fight the lawsuit. For small businesses that are struggling just to keep the lights on, the cost of paying a lawyer to fight a lawsuit is prohibitive, and they are often forced to settle, often for tens of thousands of dollars. Lawyers know they will almost never have to go court and as a result file these lawsuits in an attempt to shake down businesses for quick settlements.
Some businesses have been forced to close due to these shakedown lawsuits. Others have been forced to scale back their operations, cut employees, or raise prices. No matter what, the local community loses when lawsuit abuse increases unemployment and raises the prices we pay for goods and services every day.
This week, CALA will be spreading the word about how lawsuit abuse hurts California’s economy, and what we can do to stop it. During these past couple of years, we have seen the legislature take baby steps and pass limited legal reform to curb lawsuit abuse. Let’s hope this is a trend that continues. California’s small businesses are counting on it.