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Predatory Lawsuits: Stumbling Blocks to Economic Recovery
The Republican Party of Orange County regularly solicits the views and news of the state and federal delegation. Please read this week's Op-Ed by California State Senator Tom Harman
The current state of our legal system is causing a crisis in California and our nation.
Skyrocketing litigation-related costs are driving businesses out of our state, discouraging other businesses from setting up shop in our state, and diverting business revenues from job creation to litigation defense costs.
The U.S. Chamber of Commerce’s Institute for Legal Reform estimates that the total annual cost to U.S. businesses, both large and small, is $129 billion per year. Small businesses with $10 million or less in revenue bear 68 percent of that cost.
And it’s not just businesses that are footing the bill. We all pay the price – a hidden tax, if you will - through higher prices, lost jobs, slower growth, hampered innovation, and fewer volunteers. The list goes on and on.
By dividing the nation’s $233 billion a year tort system by population, the insurance consultancy firm Tillinghast-Towers Perrin determined that we pay a hidden "tort tax" of around $809 per person in the United States. For the average American family of four, that is more than $3,200 a year!
What’s fueling our out-of-control tort system?
Too many attorneys are stretching the rules in order to make a fast buck. Some lawyers practically manufacture cases so they can collect attorneys’ fees.
This practice has created a "cottage industry" of sorts, with tort lawyers suing anybody and everybody for the slightest infraction which they allege in their Court documents to be some sort of a terrible wrong.
Take for example a recently dismissed suit against Bayer. The suit alleged that Bayer engaged in an unfair business practice by including certain products in its "One a Day" vitamin brand that called for more than one tablet a day. Even more ridiculous than the claim itself, the suing lawyers admitted that their "plaintiff" had never bought or used any of the products in question.
Our legal system has been turned upside down.
Instead of injured individuals seeking legal assistance, lawyers are searching for "plaintiffs" in order to financially exploit some inconsistency in the business practices of someone with deep pockets.
Attorneys should not be allowed to profit from bringing cases where nobody has been injured, no malfeasance has occurred, or regulators have already taken care of the problem. It only makes common sense to proceed in this manner.
The fact remains that more often than not people are choosing to sue rather than "work it out." I believe if people simply understood the overall cost to our society and economy of the "litigate first" mentality, they not only would support tort reform, they would insist upon it.
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