Improve La.’s lawsuit climate
While the altruistic goal of America’s civil justice system is to make restitution to victims wrongfully injured, it is no secret that litigation has transformed over the last 50 years into a vast, self-perpetuating for-profit industry.
At $264 billion annually, America has the costliest legal system in the world. As a percentage of the economy, it is estimated U.S. legal liability costs are double those of the United Kingdom, three times higher than those in France and five times higher than those in Japan.
Of course, this undermines America’s ability to compete in a global economy, at a time when jobs and investments are becoming increasingly scarce. But the deeper impact of the lawsuit industry hits hardest on small businesses and individuals – especially here in Louisiana.
Nationwide, litigation costs small businesses more than $100 billion per year. A startling one in three small-business owners report that they have been sued or threatened with a lawsuit.
Obviously, it goes without saying that if a business is responsible for damage or injury, they should be held accountable for their actions. But it is much too often that lawsuits against small businesses seem to be motivated by money, rather than merit.
As the owner and manager of a small business in Metairie, I have seen more than my fair share of this – and I can tell you, regardless of the merits of the claim, the costs are real. From the legal defense costs, to the time spent away from our operations, to the lost opportunity to reinvest in our company or hire a new employee – the costs are very real.
Too often, meritless lawsuits place an unnecessary burden on small businesses such as ours and they deprive our courts of valuable time that could be spent considering legitimate claims.
In theory, the Louisiana Code of Civil Procedure, Article 863, provides guidelines for judges to use to discourage enterprising plaintiffs’ lawyers from filing frivolous lawsuits. However, there is an obvious difference between having and enforcing meaningful laws on the books. It is abundantly clear that Article 863 is under used, if at all; therefore, our current system for rooting out meritless claims is not working.
It is imperative that the Legislature considers new measures to reduce the number of frivolous lawsuits filed in Louisiana, therefore preserving a fair and efficient legal system for real claims and real victims. We must also take steps to increase citizen access and input into the legal system because lawsuit abuse affects everyone. It drives jobs out of our state. It increases the cost of every-day goods and services, like auto insurance and health care. And it hurts small-business owners, entrepreneurs and job creators.
We can, we must find a better way.
Owner and manager, Tonti Management,
New Orleans, La.