NFIB says curbs on lawsuit abuse will boost jobs and the economy
Harrisburg, PA – A small business owner and member of the National Federation of Independent Business (NFIB) recounted for members of the Senate Judiciary Committee today how his company has had to spend hundreds of thousands of dollars defending against meritless lawsuits because of Pennsylvania’s wild-West legal system in which nobody is safe from gun slinging trial lawyers.
“In spite of our accomplishments and a lifetime of hard work by numerous people, our company and our 150 employees live with a constant burden on our profitability and a threat to our very existence from the state’s present legal doctrine of joint and several liability,” said Dee Adock, President of W.W. Adock, Inc., a family-owned wholesale swimming pool supply company based in Huntington Valley, Pa.
Deetold the senators of three cases in which his company was sued for product liability even though its products were not involved, or in which the plaintiff admitted to having used them improperly. Nevertheless, because of the state’s Joint and Several Liability system, in which a business can be forced to pay all of the damages even if it can prove that it was only one-percent responsible for the accident, Adock was dragged into court and forced to pay hundreds of thousands in settlement awards and attorneys fees.
NFIB State Director Kevin Shivers, who represents roughly 14,000 small businesses in Pennsylvania, said his members fear lawsuits more than almost any other economic threat.
“Our members know that it doesn’t matter how carefully they run their businesses. They can be sued and completely ruined in Pennsylvania because of a system that establishes very powerful incentives for lawyers to bring lawsuits no matter how preposterous,” said Shivers. “The same system imposes absolutely no risks or the other end. There is no disincentive under the Pennsylvania system for bringing lawsuits that are without merit.”
Shivers and Adock argued that the Fair Share Act, which last week passed two important legislative hurdles, is an economic imperative for Pennsylvania.
“The cost and fear of litigation, combined with increasing cost of liability insurance, greatly restricts our ability to compete with companies outside Pennsylvania on a regional or national basis,” said Adock.
Shivers said that Adock’s experience is all too common among Pennsylvania small businesses.
“Pennsylvania is a high-cost, high-tax and highly regulated state that makes it difficult for businesses to compete under normal circumstances. But its most serious disadvantage – especially now with governors all over the region cutting taxes and reducing regulations – is a very promiscuous legal system that rewards trial lawyers for targeting small businesses, consumers and taxpayers.”
Under the Fair Share Act, civil defendants would have to pay damages in proportion to their actual liability. So, if a small business is sued as part of a group, and it proves in court that it was responsible for only five percent of the damage, it would be responsible for five percent.
“Imagine that,” said Shivers. “A system in which you pay your fair share. There is no justice in a system that punishes people in excess of their responsibility simply because they have the assets or insurance. In fact, that’s not justice at all. That’s opportunism, and it is the defining feature of our legal system.
“The Legislature has a chance to finally make our system fair, which will automatically make our economy more competitive, and on behalf of every small business in Pennsylvania, I certainly hope that it does so.”
For more information about NFIB, please visit www.nfib.com/pennsylvania.
NFIB is the nation’s leading small business association, with offices in Washington, D.C. and all 50 state capitals. Founded in 1943 as a nonprofit, nonpartisan organization, NFIB gives small and independent business owners a voice in shaping the public policy issues that affect their business. NFIB’s powerful network of grassroots activists send their views directly to state and federal lawmakers through our unique member-only ballot, thus playing a critical role in supporting America’s free enterprise system. NFIB’s mission is to promote and protect the right of our members to own, operate and grow their businesses.