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The National Federation of Independent Business, American Tort Reform Association, the Chamber of Commerce, and other business organizations run advertisements and tout each year that frivolous lawsuits are out of control and putting small businesses into bankruptcy and liquidation. But the fact is that the chance of a small business being by a meritless or overblown lawsuit is very small.
The NFIB’s own research proved these claims to be nothing more than urban legend when it surveyed business owners in 2005 and asked them to rank the problems they faced. The response was that the costs and frequency of lawsuits ranked 65th out of 75 problems, barely beating out “solid and hazardous waste disposal”. Furthermore, the risk of even a valid lawsuit against a business is shrinking, not growing, and has been for years. The number of civil lawsuits has shrunk by 31% since 1996 according to the U.S. Department of Justice’s examination of state court filings in the 75 most populated counties in the country. Most of those lawsuits were automobile accident cases, not cases against small businesses.
So, with tort lawsuits down by almost one third over the last 1 1/2 decades and businesses ranking fear of lawsuits lower than taking out the trash, doesn’t it seem clear that there has never been an epidemic of lawsuit abuse? Don’t follow these modern day Pied Pipers to your own demise. The only thing they really want to do is make it difficult or impossible for you to sue businesses. They are perfectly content with businesses suing you, and each other.