The Lawsuit Epidemic Is Over
September 29, 2010
The numbers simply do not lie. There has never been a “lawsuit epidemic” unless by epidemic it is means fewer and fewer lawsuit and ever smaller verdicts.
In fact, the real danger of a small business being harmed by a meritless or overblown lawsuit is small. The NFIB’s own research upheld this in 2005, when it asked 3,500 small business owners to rank the problems they faced. “Costs and Frequency of Law Suits/Threatened Suits” came in 65th of 75, barely beating out “Solid and Hazardous Waste Disposal.”Further, the risk is shrinking, not growing. The number of civil tort cases shrank by more than 31 percent from 1996 to 2005, according to a U.S. Department of Justice examination of state courts in the nation’s 75 most populous counties. The actual number of tort trials in 2005 was 7,038.Most of these trials involved automobile accidents. It’s hard to see how somebody suing somebody else over a car wreck is an obstacle to economic growth. Almost all types of tort trials declined, according to the DOJ study, with product liability cases — the kind that presumably would do the most to chill innovation — down nearly 47 percent. The only category that increased was medical malpractice up 5.5 percent.With tort trials down nearly a third and with small businesses ranking fear of lawsuits lower than taking out the trash, it seems clear that there never has been much of an epidemic of abusive lawsuits and, if there was, it’s over. Unless you’re planning to produce a defective product, worry about something else.