Saturday, June 17, 2006

Cheaper to Settle?

A recent article in the Indianapolis Star, It's Cheaper for Mom and Pop to Settle by Regan Morris (June 5, 2006), pointed out a rising trend in the legal field. Due to the rising costs of litigation, it is often cheaper for small businesses to settle lawsuits than to defend against them. Even when Mom and Pop know they have done nothing wrong.

According to Karen R. Harned, executive director of the National Federation of Independent Business Legal Foundation, "People are creating cottage industries for litigation."

This a disturbing trend. Small businesses form the backbone of many of our communities. And by filing frivolous lawsuits under the theory that the small business can't afford the cost of defending itself in court, we undercut the foundations of our legal system. And as an attorney who works with small businesses in the heartland, I can attest to the cost benefit analysis that the owners undertake each time a lawsuit is threatened. Whether or not the threat is legitimate.


Tricia Goyer said...

That is a sad statistic.

We had a lawsuit against us as homeowners by someone who was on our building site without anyone else here who supposedly got hurt.

Thankfully our insurance took care of it, but we did have to go through two years of a legal battle. Not fun.

Pam Meyers said...

Hi Cara,
I look forward to reading your blog! I don't really have a comment about this post, just wanted to say hello and that I'm sure I'm going to enjoy reading your posts here. Glad to see you are in the blogosphere!



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