Are more lawsuits the answer to our sluggish economy? Certain trial lawyers seem to think so. They are working hard to make lawsuits a growing and thriving industry. They are exhibiting the same zeal, entrepreneurialism, and creativity as the small business innovators who are leading our economic recovery. The difference is that lawsuits undermine businesses of all sizes, our competitiveness, and our economic recovery.
You almost have to admire the trial bar's ingenuity. It's attempted to bilk companies out of billions of dollars in false asbestos claims. It's pioneered new schemes for huge class action suits. It's attacked arbitration to force more conflicts into court. And it's engineered devastating public relations campaigns to force defendants to settle frivolous claims before their companies' reputation is ruined.
Now, the trial bar wants to import foreignbased claims and judgments to the United States.
There has been a sharp rise over the past 15 years in lawsuits brought against U.S. companies based on alleged personal or environmental injuries that occur overseas. For example, international and U.S. trial lawyers filed multiple lawsuits against Dole Foods, The Dow Chemical Company, and Shell Oil both in the United States and Nicaragua for allegedly exposing banana plantation workers to pesticides.
Here's what the trial bar did: It lobbied to change Nicaraguan law retroactively to deprive the defendants of due process, fabricated testimony from plaintiffs who never worked at a banana plantation, and conspired with a local judge to rig judgments. Fortunately, U.S. judges have not yet bought their tactics—but that doesn't mean the trial lawyers will stop trying!
The trial bar is also attempting to create new venues in which to sue American companies by exporting our broken class action system overseas. It's already convinced some leaders in Europe, Canada, and Australia to adopt our model and is working on Latin America.
Helping propel a wave of new lawsuits is third-party litigation financing, where outside investors fund lawsuits in exchange for a share of the award or settlement. Here in Washington I hear dumb ideas every day of the week. But this one takes the cake!
The bottom line is if you build a system conducive to lawsuits, they will come. Only one problem—they will destroy jobs, competitiveness, and economic growth. People who have been wronged deserve their day in court, but this massive spread of lawsuits for profit undermines justice.
Visit www.instituteforlegalreform.com to learn how the U.S. Chamber and its Institute for Legal Reform are working to make our legal system simpler, faster, and fairer.
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