Missing: Debate on Tort Reform in Congress

By March 18, 2009Briefly Legal, Economy

Sen. John Cornyn (R-TX) held a Senate Republican Conference (i.e., partisan) hearing Monday, “Protecting Main Street Jobs From Lawsuit Abuse,”  highlighting the absence of any serious consideration of legal reform during the 111th Congress. From Cornyn’s opening statement:

As the president talked today about his efforts to help small business, it’s important to acknowledge that litigation costs can have a disproportionately high impact on small businesses and their ability to retain and hire new employees. Large corporations usually carry significant insurance and have robust budgets to cover the litigation costs, but smaller businesses may find that one lawsuit can result in legal fees approaching a year’s revenue. And that’s even if you win the lawsuit in the end.

Small entrepreneurs who are netting $100,000 a year after taxes and payroll are prospering and likely creating jobs, but that $100,000 can easily be destroyed by legal fees from even one lawsuit. Too often for American Main Street businesses, the costs of being sued, even if the suit lacks merit, can be tantamount to a death sentence for their business.

Nevertheless, the leadership of this Congress seems oblivious to these facts and determined, to reward political allies and benefactors in the trial bar by passing legislation designed to not decrease but rather increase the number of lawsuits in America.

We have three posts on the hearing over at the Point of Law website sponsored by the Manhattan Institute.

Ted Frank of the American Enterprise Institute, who testified, wrote about the hearing at Overlawyered.com, “On C-SPAN tonight: ‘Protecting Main Street From Lawsuit Abuse’

Both Frank and Howard’s statements provide excellent summaries of the economic and personal harm caused by meritless and frivolous lawsuits. Highly recommended.

 

 

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