Chamber Calls for Comprehensive Reform to Protect U.S. Small Businesses from Lawsuit Abuse

WASHINGTON, D.C. – Immediate legislative action and a host of other reforms are needed to protect America's small business owners from lawsuit abuse, said Lisa Rickard, president of the U.S. Chamber Institute for Legal Reform, in testimony today before the House Small Business Subcommittee on Regulatory Reform and Oversight.

"No sector of our economy is hit harder by lawsuit abuse than small business owners," said Rickard, pointing to a recent study showing the tort system costs U.S. small businesses $88 billion a year. "Small businesses are paying a high price for our legal crisis in the form of lost opportunities to expand their businesses and invest in tens of thousands of new American jobs."

The total annual cost of the tort system to U.S. businesses (large and small) is $129 billion per year, according to the study, conducted for ILR by NERA Economic Consulting. Small businesses with $10 million or less in revenue bear 68 percent of that cost. That equates to about $150,000 a year for each small business – money that could be used to hire additional employees, expand operations or improve health coverage.

"Frivolous lawsuits are hitting the pocketbooks of hard-working Americans, threatening their jobs and raising prices," added Rickard. "I urge Congress to protect our economy, save American jobs, and take swift action to pass the vital legal reform bills that are pending before this Institution."

ILR supports a variety of legal reform bills currently pending before Congress, including the Class Action Fairness Act, the Fairness in Asbestos Injury Resolution Act, the Lawsuit Abuse Reduction Act, and the Small Business Liability Reform Act.

The mission of the Institute for Legal Reform is to make America's legal system simpler, fairer and faster for everyone. It seeks to promote civil justice reform through legislative, political, judicial and educational activities at the national, state and local levels.

The U.S. Chamber of Commerce is the world's largest business federation, representing more than three million businesses and organizations of every size, sector and region.

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A full copy of Rickard's testimony and the ILR study is available online. http://www.legalreformnow.com/