Small Businesses Hit Hard by Lawsuit Abuse

Small businesses are the backbone of our economy. According to the National Federation of Independent Business (NIFB), America’s leading small business association, small businesses in this country employ about half of private-sector employees, have generated 60 to 80 percent of net new jobs annually over the last decade, and create more than half of nonfarm private gross domestic product. Yet these businesses are increasingly targeted with frivolous lawsuits by plaintiff’s attorneys that use every tool in their lawsuit abuse toolbox to create them.

Every summer, Sick of Lawsuits highlights how lawsuit abuse and the inappropriate tactics of greedy plaintiffs’ attorneys can hurt small businesses across the country. More and more, these plaintiffs’ attorneys are targeting small businesses with shakedown tactics – all for their own personal gain. These lawsuits result in expensive settlement fees, prolonged legal battles and increased insurance rates for small businesses victimized by frivolous lawsuits.

In fact, these lawsuits often force businesses to close their doors. What’s more frustrating about targeting small businesses is that fighting these lawsuits is usually more costly than settling them, and businesses with limited resources must often settle quickly – even if they’ve done nothing wrong.

One type of lawsuit tactic that is increasingly common is filing lawsuits brought under the Americans with Disabilities Act of 1990 (the “ADA”). The rush of these lawsuits first occurred in California, but have been plaguing small businesses in states like Texas, New York, Florida and Arizona.

While the ADA is a very well-intentioned law, designed to provide access to people with disabilities, trial lawyers and other serial lawsuit filers are abusing these laws to line their pockets. Lawsuits are often brought on the grounds of minor infractions, such as a faded handicapped parking sign, and require no corrective action from the supposed offender. Thus, trail lawyers can continually target businesses with minor infractions that don’t truly harm anyone in order to make cash quick – and no there is no real, resulting change.

Small businesses tend to be the primary target of these lawsuits because they usually lack the financial resources to fight them in court. But they’re still forfeiting plenty of cash to settle. Over the years, we have witnessed small businesses lay off employees and cut community support in order to offset litigation or settlement expenses. These lawsuits accomplish nothing – they simply limit job growth and job creation and make money for greedy trial lawyers.

While we cannot entirely prevent unwarranted lawsuits from being filed, small businesses can seek accurate information about changes they may need to make at their locations and advocate for change to their legislators. Together, we can all work towards a more just use of our legal system.