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Washington, D.C., May 9, 2005—A new coalition has been
formed to support the federal Lawsuit Abuse Reduction Act of
2005 (LARA), H.R. 420. This common-sense legislation would
help put an end to personal injury lawyers gaming the civil
justice system by filing frivolous lawsuits and forum shopping.
These abuses are a threat to American businesses and their
employees.
The new Lawsuit Abuse Reform Coalition (LARC) includes
more than 70 organizations that represent the broadest spectrum
of American businesses. The membership list is available at
www.atra.org, along with detailed information about H.R. 420
and why it is needed.
LARC was formed in
partnership among
ATRA,
the
National
Association of Manufacturers (NAM), the National
Association of Wholesaler-Distributors (NAW), the
National Federation of Independent Business (NFIB), the
National Restaurant Association (NRA), and the U.S.
Chamber Institute for Legal Reform (ILR).
“Lawsuit abuse has
become an increasingly serious topic nationwide,” said
Tiger
Joyce, LARC
Chairman and ATRA
President. "The coalition represents millions of small
businesses that have been or are potential victims of some of
the worst abuses of our civil justice system— frivolous lawsuits
and forum shopping.”
Chairman Joyce also
observed: “Far too often the system allows, in effect, legal
extortion. The threat of costly and lengthy litigation forces
businesses to settle frivolous claims that could potentially put
them out of business. While it costs the plaintiff only a little
more than a small filing fee to begin a lawsuit, it costs much
more for a small business to defend against it.”
H.R 420 would deter the filing of frivolous lawsuits by placing
the cost of defending frivolous claims on the lawyers who bring
them. LARA also would put an end to forum shopping or litigation
tourism by properly limiting the filing of civil tort claims to
places where plaintiffs live or were hurt, or in the
jurisdiction of the defendant’s principal place of business.
ATRA General Counsel
Victor E.
Schwartz observes that, “There is no reason for cases
to be brought elsewhere unless one is seeking a biased forum for
a case to be heard. Wealthy personal injury lawyers call these
places ‘magic jurisdictions’ because they promise easy jackpot
justice. ATRA calls these places ‘Judicial Hellholes.’”
“When it comes to issues that matter most to small business,
legal reform is second only to the cost of health care,” said
NFIB Executive Vice President Dan Danner. “Litigation has
become a big business, and it is putting small companies out of
business. A central goal of this coalition is to secure passage
of legislation to better protect small business from lawsuit
abuse, because they simply can't afford to continue being preyed
upon by attorneys who unfairly target small businesses.”
“The undue burden of frivolous lawsuits on small business owners
threatens jobs across America—including the 12.2 million
employees of the restaurant-and-foodservice industry—and creates
a logjam in civil courtrooms. As a member of the Lawsuit Abuse
Reduction Coalition, the National Restaurant Association is
committed to addressing these costly and excessive abuses of our
judicial system,” said Lee Culpepper, Senior Vice
President of Government Affairs and Public Policy for NRA.
NAM Executive Vice President Michael Baroody noted his
organization’s study showing that, “Small manufacturers’ ability
to compete internationally is disproportionately affected by
America’s relatively high cost of doing business. And lawsuit
abuse accounts for a disproportionately high percentage of those
costs.”
“Small business owners are footing the bill for America’s
litigation explosion to the tune of $88 billion annually,” said
Lisa Rickard, President of the U.S. Chamber ILR. “We are
committed to passing the Lawsuit Abuse Reduction Act as it will
provide much-needed relief to small businesses and curb lawsuit
abuse by unscrupulous trial lawyers.”
LARA was reintroduced January 26 in the U.S. House of
Representatives by Representative Lamar Smith (TX). Last
year, the House passed the Lawsuit Abuse Reduction Act of 2004
(H.R. 4571) on September 14, 2004, by a bipartisan vote of
229-174. The bill was not introduced in the Senate.
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