Chabot-Boren Introduce Bipartisan Bill to Limit Predatory Lawsuits Against Small Businesses
Responding to small businesses becoming a primary target of "predatory" lawsuits, Congressman Steve Chabot (R-OH) and Congressman Dan Boren (D-OK) introduced the Small Business Liability Reform Act of 2007. The bipartisan legislation is designed to reduce frivolous lawsuits against small businesses - helping protect small business owners from unnecessary legal expenses and consumers from paying higher prices to offset soaring litigation costs.
"The cost of defending against frivolous lawsuits is unfairly falling on small business owners," said Congressman Chabot, the Ranking Member of the House Small Business Committee. "Small businesses are becoming a frequent and favorite target, taking on a disproportionate share of rapidly rising tort costs. This bill will save American small businesses and consumers billions of dollars in frivolous lawsuit costs."
According to the U.S. Chamber's Institute for Legal Reform, small businesses bear 69 percent of business tort liability costs while taking in only 19 percent of business revenues. With tort costs approaching $100 billion annually and threatening to put many small firms out of business, Chabot said the Small Business Liability Reform Act would both "limit predatory lawsuits and strengthen the justice system by ensuring that cases with legal merit move forward."
Under the legislation, a plaintiff would maintain the same ability as under current law to pursue economic damages. Damages related to mental anguish or pain and suffering, however, would be required to be in proportion to the small business' responsibility in the matter. The legislation would also raise punitive damages standards in an effort to limit frivolous lawsuits against any small business with 50 or fewer employees.
Ranking Member Chabot has been a longtime advocate for legal reform that will help consumers and small businesses. In February, Chabot and Boren partnered to introduce the Innocent Sellers Act of 2007, which would protect responsible retailers from having to spend thousands of dollars on legal fees or unwarranted settlements as a result of frivolous lawsuits.