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May 9, 2001

Chamber Calls For Swift Action On Small Business Liability Reform Bill

WASHINGTON, D.C., May 10, 2001 – The United States Chamber of Commerce called the introduction today of legislation that would help to prevent lawsuit abuse that targets small businesses, while protecting the rights of those with legitimate claims, long overdue.

“Small businesses too often settle lawsuits for large sums regardless of the merits, in fear of being crushed by the weight of unlimited punitive damage awards,” said Thomas Donohue, Chamber President and CEO. “The legal fees alone from one lawsuit – frivolous or not – can put a small company out of business.”

Bipartisan legislation introduced today would limit punitive damage awards against small enterprises. The bill is sponsored by Reps. Asa Hutchinson (R-AK), Tom Holden (D-PA), Richard Burr (R-NC), Jim Moran (D-VA), Steve Chabot (R-OH) and Cal Dooley (D-CA) in the House and Senators Joseph Lieberman (D-CT) and Mitch McConnell (R-KY) in the Senate.

Currently small businesses can be held completely responsible for 100% of any court judgment, regardless of their degree of responsibility, according to the Chamber. The bill, if passed into law, would mean small business defendants could only be required to pay the percentage of a judgment that matches their responsibility for any harm caused.

“Lawsuit abuse has created a climate of fear with a chilling effect on new product creation and business expansion,” said Donohue. “This common sense legislation will discourage costly and frivolous lawsuits against small business owners and help to restore fairness to our civil justice system.”

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