PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

H.R. 985: Fairness in Class Action Litigation Act of 2017

By at 28 February, 2017, 8:24 am

The Honorable Robert Goodlatte

Chairman

Committee on the Judiciary

U.S. House of Representatives

Washington, D.C. 20515

 

Dear Chairman Goodlatte:

The Small Business & Entrepreneurship Council (SBE Council) and our nationwide membership of small business owners and entrepreneurs strongly support H.R. 985, the Fairness in Class Action Litigation Act. We were very pleased to see this important piece of legislation advance in the House Judiciary Committee on February 15.

Lawsuit abuse imposes heavy costs on the U.S. economy, and that includes reducing choices and raising prices for consumers; increasing costs, risks and uncertainty for businesses of all types and sizes; and reducing economic and employment growth.

The Institute for Legal Reform has summed the problems with our litigation system this way: “America has the world’s costliest legal system. As a percentage of our economy, U.S. legal liability costs are double those of the UK, three times higher than those in France and five times higher than those in Japan. Our nation’s litigation addiction hurts families, businesses, communities, and America’s ability to compete for jobs and investment in a global economy.” And as for the impact on the small business community, it was noted: “Litigation costs small businesses in America over $100 billion per year.  One in three small business owners report that they have been sued or threatened with a lawsuit – and if sued, more than two-thirds say they would likely have to pass legal costs on to consumers, reduce employee benefits and hold off on hiring new employees.”

Make no mistake, class action lawsuit abuse counts as a major part of this problem. While class actions were meant to make it fairer for consumers and businesses to gain access to the justice system for their grievances, it has been transformed into a system seemingly designed for lawyers to cash in based on often dubious and expansive claims.

H.R. 985 offers a series of welcome reforms, such as preventing injured individuals from being forced into class actions with those with minimal or no injuries; mandating that courts use objective criteria in determining who is injured and how compensation is dispensed; requiring that injured parties are paid before lawyers and lawyer fees are limited to a reasonable percentage of awards; and limiting abuses related to forum shopping.

These are common-sense measures that certainly have the support of America’s small business community. Thank you for your leadership, and please let SBE Council know how we can help you advance H.R. 985 into law.

Sincerely,

Karen Kerrigan, President & CEO

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