NFIB

Americans are famous for rallying to great causes. When natural disasters strike, the nation’s citizens never hesitate to reach out to those who are suffering. When challenges to our national security occur, the hands of volunteers rise instantly. Major strides in medical science have become possible through the fund-raising efforts of those who cared enough to get involved.

Today, there is a disease that, if not treated and cured, could become fatal to millions of American small businesses and the jobs they create. It hasn’t attracted the public attention that human diseases garner, but the potential for spreading like a plague exists. In fact, it has already taken root within our legal system and is growing at a phenomenal rate.

Spreading its malignant fingers to endanger the nation’s free-enterprise sector is a deadly practice of lawsuit abuse that today costs Americans more than $200 billion dollars a year — the equivalent of a 5 percent tax on wages. While some claims are legitimate, a large percentage of lawsuits are completely without merit. But even when cases are frivolous, businesses have no choice but to dig deep to defend themselves, spending hard-earned dollars that should be allocated to growing their businesses and adding employees.

To draw attention to this dangerous disease, small-business activists will raise this and other issues during National Lawsuit Abuse Awareness Week, Oct. 3-7. During the week, local, state and national organizations will cast the spotlight on individuals and attorneys who file baseless claims and victimize innocent people. These abusers of our legal system should be held accountable for their actions.

Pro–small-business members of Congress also are joining the search for a cure by working for passage of H.R. 420, the Lawsuit Abuse Reduction Act. The legislation discourages frivolous lawsuits by reinstating several important provisions of Rule 11 of the Federal Rules of Civil Procedures — rules that were changed in 1993. It also adds several new provisions to deter baseless claims.

A recently released NFIB Research Foundation poll found that the median total cost to settle a legal dispute is about $5,000. Considering that the average small-business owner’s salary is less than $50,000 a year, it should be easy to understand why the economic pressures to settle are enormous. In fact, small-business owners say being sued is one of the most threatening experiences they encounter — especially for the smallest firms that could be put out of business by one frivolous lawsuit.

Liability reform is gaining momentum. States across the nation have recognized the need for change and have taken steps to limit frivolous lawsuits.

Anyone who doubts the need for lawsuit reform need only look to the recent attempts by trial lawyers to threaten legal action against caring citizens who rushed to aid Hurricane Katrina victims. When an institution of American society becomes so diseased that Good Samaritans are sued when trying to help people, the search for a cure must begin in earnest.

Jack Faris is the president of NFIB (the National Federation of Independent Business), the nation’s largest small-business advocacy group. A nonprofit, nonpartisan organization founded in 1943, NFIB represents the consensus views of its 600,000 members in Washington, D.C., and all 50 state capitals.