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San Diego
Monday, May 20, 2024

Some Seek Pay-as-You-Lose Legal System to Curb Frivolous Suits

Talk about timing.

A day before the San Diego Citizens Against Lawsuit Abuse held its annual luncheon highlighting the adverse impacts of lawsuit abuse on businesses and the economy, William Lerach, a disbarred attorney who participated in kickback schemes that secretly paid plaintiffs for hundreds of class-action lawsuits brought against U.S. companies, reported to a low-security California prison to serve a two-year term.

Lerach, a poster child for abusing the legal system, supplied ample material for the May 20 event’s presenters, including Mayor Jerry Sanders, who quipped, “That’s my life every day with the city attorney.”

A panel of representatives from the building, hospitality, restaurant and life sciences industries decried the effects of what they called “frivolous” lawsuits brought against their businesses.

Sam Hardage, chief executive officer of Woodfin Suites Hotels LLC, told the audience that his hotels are “serial victims” of Americans with Disabilities Act-compliance lawsuits.

“The problem is, of course, with an ADA lawsuit, we’re up against a stacked deck,” he said. “If we defend this and lose, we have to pay our attorney’s fees and his attorney’s fees. If he loses, he doesn’t have to pay our attorney’s fees. That’s not a fair deal.”

Hardage and other industry representatives spoke in support of a so-called “loser pay” system, which would force plaintiffs to pay attorney fees if they were to lose. A loser-pay system would serve to curb the amount of costly and frivolous lawsuits brought against businesses, they said.

Matt Adams, vice president of government affairs for the local Building Industry Association, went so far as to blame frivolous litigation on the collapse of the condominium conversion market.

“It jeopardized our families, it jeopardized our economy and it jeopardized our entire economic base of employees,” he said.

He cited a statistic that 81 percent of all condominium projects built in San Diego resulted in litigation at one time. Most never went to trial, he said, because plaintiffs were simply seeking a financial settlement.

San Diego Citizens Against Lawsuit Abuse is a local nonprofit that works to prevent improper use of the legal system for personal financial gain.

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