December 22, 2010

Speaking Out: Small Businesses, Schools, and Communities Victimized by Lawsuit Abuse

Sitting in the defendant’s chair can be a nightmare scenario for any small business owner. So imagine the toll of sitting in that seat over and over . . . and over.

That’s not a hypothetical for the folks at Peachtree Pest Control – it’s a terrible reality.

In 1996, Peachtree, a family owned pest control business based out of Loganville, Georgia, was sued by a worker at an office complex it had once serviced. The EPA and Georgia Department of Agriculture agree that Peachtree behaved in accordance with all laws and regulations while conducting its work, and court testimony revealed the plaintiff worked nowhere near the treatment area. But that didn’t stop her from suing Peachtree.

A jury eventually ruled in favor of Peachtree, but an appeals court remanded the case, forcing a second trial. A second jury again ruled in favor of Peachtree. The plaintiff has threatened to appeal yet again (although she did offer to settle for a $500,000 payment).

“Everyone deserves their day in court. But when is enough, enough?” asks owner Steve Arnold. “It tears me up to this day, sitting there thinking that everything I built is on the line.”

Horror stories like this are the reason the Institute for Legal Reform (ILR) started itsFaces of Lawsuit Abuse project in 2007. The campaign currently features 21 videos of small business owners and individuals explaining in their own words the devastating effects of being sued – the time away from their families, the hours spent preparing for cases instead of focusing on their work, the crippling fear that they could lose everything they had spent their lives building.

As the economy struggles to right itself, frivolous litigation adds yet another job-killing burden to America’s small businesses. These businesses create nearly two-thirds of new jobs, but they are among the most vulnerable to litigation. A recentILR poll of small business owners found that, if faced with a lawsuit, 74 percent say companies such as theirs would very likely have to pass those costs on to their customers; 68 percent say they would very likely have to reduce existing employees’ benefits; and 71 percent say they would very likely have to hold back on hiring new employees.

And the victims of lawsuit abuse aren’t limited to the defendants themselves. The consequences also extend to the surrounding communities. A case in point would be the removal of swing sets from school playgrounds in Cabell County, West Virginia, due to lawsuit fears.

The school system decided to remove its swing sets in response to a pair of lawsuits filed by the same parent over two separate minor accidents involving two different children. The school district, already reeling from the economic downturn, decided it simply could not afford the costs related to any potential future litigation.

“The tragedy is that the kids are losing everything that is fun about being a kid,” says parent Donna Mooney. “You can’t bubble wrap everything from them. They have to be allowed to play and be kids.”

The videos featuring Peachtree Pest Control and the Cabell County school system are currently playing at FacesOfLawsuitAbuse.org. As the people in the videos can tell you: America needs more jobs, not more lawsuits.

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