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More Lawsuit Abuse Not What We Voted for in Election

Whatever change voters were seeking in November, there is no record of any mass of them calling for greater rights for lawyers to sue.

Sensing a new political mood afoot in the nation, however, personal-injury attorneys are girding their loins for another charge at changing state laws to enrich themselves through artificially aggrieved clients and billable hours , and nowhere is that more evident than in California.

The trial attorneys’ lobby is a powerful one in Sacramento. Its success can be measured in the Golden State’s dismal ranking of 44th out of 50 in a Harris survey, Lawsuit Climate 2008, and in California’s inclusion in Forbes magazine’s rating of the 10 worst states to do business.

The one pebble in the shoe of the legislative lobbying giant has been Gov. Arnold Schwarzenegger.

In 2004, the governor scored one of his most popular victories when he campaigned for the successful passage of Proposition 64, which ended the insidious practice of shakedown lawsuits, whereby any attorney could sue on behalf of the people of California, even though no injured party could be found.

These shakedown lawsuits included such ridiculous things as punishing an auto dealer for using the abbreviation APR instead of spelling out annual percentage rate in newspaper ads.

More often than not, defendants would simply settle out of court , something lawyers had planned on , rather than incurring the cost of a trial.

After Proposition 64 passed, lawyers had to produce an actual injured party and could no longer sue on behalf of the people of California, who never saw a dime of the settlements anyway.

But the initiative’s passage only took the lawyers’ foot off the gas pedal for a second.

Every year since, they have succeeded in getting a pliable Legislature to put some bill or another on the governor’s desk that would open up new revenue streams for them at the expense of business owners.

New penalties for misclassifying employees as independent contractors, new penalties for a perceived breach of customer data , even if no damage occurred , and new opportunities for exploiting the workers’ compensation system were all measures that landed on the governor’s desk in the past few years but were, thankfully, met with his veto.

Most Egregious

That last attempt is perhaps the most egregious, since the workers’ compensation system was established a century ago for the purpose of eliminating the need for lawyers from the whole equation.

On a national level, personal injury lawyers are calling on the Obama administration to repeal regulations that have been put in place during the past eight years that protect employers against unreasonable lawsuits and would greatly expand liability , all in the name, of course, of “consumer protection.”

They believe the wind blowing against “big business” is to their backs, pushing them faster toward treasure chests of jury awards and out-of-court settlements.

Yet in California, an estimated 90 percent of businesses have 10 or fewer employees. Nationally, small businesses employ 50 million people, compared with approximately 19 million who work at large companies.

These are the businesses that will be hurt if personal injury lawyers succeed in their effort to repeal sensible reforms and further erode the foundation that drives California’s and the nation’s economy.

Nearly 95 percent of California small-business owners believe current law favors those who sue, and 98 percent of respondents believe new laws are needed to protect businesses against lawsuit abuse, according to a joint poll conducted by the National Federation of Independent Business and California Citizens Against Lawsuit Abuse.

An Associated Press national poll taken on inauguration day indicates that 53 percent of Americans feel optimistic.

Yet at this time of hope and optimism, California is on the brink of insolvency. In the face of such a paradox, Californians need to be more vigilant than ever about the efforts of the trial bar that undoubtedly will result in more businesses closing their doors, leaving the state and adding to the millions of jobless Californians.

That kind of change is one we simply can’t shoulder.

John Kabateck is California executive director for the National Federation of Independent Business. John Merchant is co-chairman of California Citizens Against Lawsuit Abuse.

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