Study Disputes “Tort Reform’s” Importance to Small Businesses and to Overall Economy

For Immediate Release:
May 14, 2001

Contact: Joanne Doroshow
212/267-2801

STUDY DISPUTES “TORT REFORM’S” IMPORTSNCE TO SMALL BUSINESSES AND TO OVERALL ECONOMY

New York, NY - A new report issued by the Center for Justice & Democracy (CJ&D) disputes one of the most sensationalized fictions driving the ‘tort reform’ movement today -- the notion that lawmakers must restrict the rights of injured consumers to sue in order for a state’s business economy to grow or even survive.

CJ&D Executive Director Joanne Doroshow, co-author of the study, Survey Says … “Tort Reform” Not Priority for Businesses, said, “If you listen to corporate lobbyists, they will tell you that lawsuits by consumers are creating economic ‘crises’ in states that are driving out businesses, doctors and other professions. They tell lawmakers that ‘tort reform’ legislation is needed for small businesses to survive and to attract new businesses to their state, and even more daunting, that unless ‘tort reform’ is enacted, businesses and doctors leave. This is pure fiction.

“Internal business surveys consistently show that when it comes to issues that are important for small businesses and to a state’s overall business climate, liability issues rank far below other matters of far more importance, like workforce, healthcare and a range of tax and regulatory issues -- if they rank at all. Moreover, liability laws are irrelevant factors to businesses deciding where to locate.”

Report co-author Emily Gottlieb, CJ&D Deputy Director, explained, “We ranked states based on the number of major tort law limits enacted since 1985, and correlated those findings with the states that have built the most number of new facilities or plants. We found there to be absolutely no connection between a state’s enactment of ‘tort reform’ and the state's relative attraction for businesses.”

On May 10, federal tort reform legislation was unveiled in the U.S. House and Senate that would protect certain small businesses and other companies from being held accountable in court for wrongdoing.