Washington,
DC (September 14, 2015) – The National
Federation of Independent Business (NFIB) today told Congress that a vote
later this week on a bill aimed at reducing frivolous lawsuits would be one of
the top priorities this session for US small businesses.
“Few things are more worrisome to American small
business owners than the possibility of being dragged into court as the target
of a frivolous lawsuit,” said NFIB Sr.
Legal Counsel Beth Milito. “Under
the current system there is nearly zero financial risk for trial attorneys and
their clients who bring cases that should otherwise be laughed out of
court.
“This legislation would let judges decide whether
lawsuits are frivolous based on existing legal principles and then hold
plaintiffs responsible for the defendant’s legal expenses,” she said.
The bill, HR-758, would close an escape hatch
created by the courts that lets attorneys withdraw outlandish claims in time to
avoid penalties.
“The so-called safe harbor provision creates a
no-win scenario for small businesses,” said Milito. “You have to hire a lawyer no matter how weak
the case against you appears. If you
lose the case, you have to pay. If you
settle before trial, you have to pay.
And even if you win the case, you still have to pay your legal bills.
“On the other side the plaintiff has everything to
gain by filing even a weak case and absolutely nothing to lose,”
Amending the “safe harbor” provision so that
defendants can recoup their legal expenses is one small way to discourage
frivolous lawsuits, said Milito.
“This is not a barrier to justice, as the trial
lawyers will claim. It’s a speed bump on
the way to trial,” she said. “Legitimate
claims against businesses will have no problem clearing all of the legal
standards. But the most frivolous cases
will hopefully not make it to court because of the risk, and the civil
justice system will work more fairly and more predictably for small business
owners.”
