Curbing Frivolous Lawsuit Abuse
DATE: September 17, 2004
Washington, DC: Frivolous lawsuits are burdening our court system and exacting a terrible strain on small businesses and individuals alike.
We are living in a culture where suing is the first recourse rather than the last. We have all heard ridiculous accounts of lawsuits which make a mockery of our judicial system.
One such account took place at a New Jersey Little League game, where a fly ball was hit, and a player in the outfield lost sight of the ball as a result of the sun. He was hurt when the ball hit him in the eye. The coach of the team was forced to hire a lawyer when the boy's parents sued. The coach ultimately settled the case for $25,000. Sadly this story, while striking, is not an exception.
During the past 50 years, growth in tort costs has exceeded growth in our nation's GDP by an average of two to three percentage points. On September 8th of this year, Federal Reserve Board Chairman Alan Greenspan, testifying before a House Committee, said that excessive lawsuits are like a tax on business activity. In fact, small businesses rank the cost and availability of liability insurance as second only to the costs of health care as their top priority-both of which are problems ultimately fueled by frivolous lawsuits.
Recognizing the severity of the problem, and the inherent economic impact of frivolous lawsuits, the House last week passed legislation aimed at reducing lawsuit abuse.
This legislation will restore mandatory sanctions for frivolous lawsuits, while also abolishing the current "free pass" provision which allows lawyers to avoid sanctions for making frivolous claims by simply withdrawing these claims within 21 days after a motion for sanctions has been filed.
It also expands existing provisions preventing frivolous lawsuits to make them apply to state cases in which a state judge finds that the case affects interstate commerce by threatening jobs and economic losses to other states.
In addition, the legislation prevents forum-shopping, requiring that personal injury claims only be filed in the state, county or federal district where the plaintiff resides, where the injury occurred, or in the state or county where the defendant's main place of business is located. This will alleviate the all too common practice of attorneys shopping around the country for sympathetic judges who have exhibited a greater tendency toward awarding plaintiffs excessive amounts. As it stands, in some cases a party can bring a suit in almost any jurisdiction, with nothing to lose.
I am hopeful that this legislation, and other measures before Congress, among them my Class Action Reform legislation which is still awaiting passage in the Senate, will help restore confidence in America's justice system.