November 13, 2013
On behalf of the National Federation of Independent Business (NFIB), the nation’s leading small business advocacy organization, I am writing in strong support of H.R. 2655, the Lawsuit Abuse Reduction Act of 2013. Final passage of H.R. 2655 will be considered an NFIB Key Vote for the 113th Congress.
H.R. 2655 will help to significantly reduce the filing of frivolous lawsuits and motions by amending Rule 11 of the Federal Rules of Civil Procedure. Since 1993, Rule 11 has been hamstrung by changes that loosened its effectiveness in preventing frivolous filings. The Civil Rules Advisory Committee, despite overwhelming support for Rule 11 from federal judges, decided to weaken the rule by creating a “safe harbor” provision that allows parties and their counsel to avoid sanctions simply by withdrawing their frivolous claims within 21 days of the motion for sanction being filed. This “safe harbor” provision gutted Rule 11 and took away any real incentive for attorneys to avoid frivolous filings.
Even if the frivolous lawsuit is withdrawn or dismissed, the victim is still left with legal expenses that can easily add up to thousands of dollars. Therefore, it is of critical importance that H.R. 2655 will provide those who are hit with frivolous lawsuits with a reasonable opportunity to seek reimbursement for their legal expenses. Particularly in today’s economy, the ever-rising costs of healthcare and excessive federal regulations, frivolous lawsuits can result in lost jobs and increased financial hardship.
Eighty-four percent of NFIB members agree that attorneys should face mandatory sanctions if they bring forth a frivolous lawsuit. H.R. 2655 also provides that once a judge finds that a claim is frivolous under existing legal principles, the court must impose a sanction. The bill restores the ability of federal judges to use sanctions to compensate an injured party for his or her reasonable attorneys’ fees and costs resulting from the frivolous claim.
The Lawsuit Abuse Reduction Act will help to reduce the number of frivolous lawsuits and the exorbitant costs that can drive many businesses to financial ruin. NFIB urges you to support final passage of H.R. 2655 and will consider it an NFIB Key Vote for the 113th Congress.
Senior Vice President