New Report Shows That Reducing Lawsuits Can Help Boost California’s Economy

Why is California so expensive to do business?  Because the courts are set up to accept all lawsuits, good, bad or ugly and let them go years in the system—costing jobs, tax revenues and the formation of news business, since insurance is so expensive against potential lawsuits.

“Among the study’s other key findings: the yearly fiscal losses are estimated at $961 million in state revenues and $804.7 million for local governments. The study goes on to note that tort reform efforts as used in other states, such as legislation to set limits on punitive and noneconomic damages, can result in economic benefits and other positive outcomes.

By enhancing the efficiency, fairness and predictability of the California civil justice system, the benefits can include, for example, an improved climate for economic development in the state that businesses may find desirable for expansion or relocation, according to the study”.
Literally our schools and roads are harmed by the current system due to lost tax revenues.  Isn’t it time to protect ourselves from an out of control system?

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New Report Shows That Reducing Lawsuits Can Help Boost California’s Economy

MaryAnn Marino, Citizens Against Lawsuit Abuse,  10/15/18

 

 

     SACRAMENTO  – A new study on the costs of excessive tort lawsuits in California shows overall economic losses totaling $11.6 billion in annual direct costs, according to Citizens Against Lawsuit Abuse (CALA).
The CALA report, titled the Economic Benefits of Tort Reform, estimates that unwarranted tort litigation inflicts additional losses of $18.5 billion in output (gross product) each year combined with the loss of 197,776 jobs when dynamic effects are considered.  All major industry groups are negatively impacted, with the greatest losses endured by retail, business services, and health service industries.The study was conducted by The Perryman Group, a Waco, Texas-based economic and financial analysis firm. They calculated the actual and potential economic benefits for California by using cost benchmarks based on tort reform changes made in recent years by the state of Ohio.

“This research shows the need to correct our state’s flawed civil justice system, one that continues to generate exorbitant levels of monetary damages in tort cases,” said Ken Barnes, executive director of CALA, which commissioned the nonpartisan work. “We must ensure that injured persons are made whole, while at the same time removing perverse incentives for the filing of frivolous lawsuits. Billions of dollars are being extracted from our economy, and the end results are lower wages, fewer jobs, and closed businesses.”

Among the study’s other key findings: the yearly fiscal losses are estimated at $961 million in state revenues and $804.7 million for local governments. The study goes on to note that tort reform efforts as used in other states, such as legislation to set limits on punitive and noneconomic damages, can result in economic benefits and other positive outcomes.

By enhancing the efficiency, fairness and predictability of the California civil justice system, the benefits can include, for example, an improved climate for economic development in the state that businesses may find desirable for expansion or relocation, according to the study.

A prime example of where reform is needed in California, according to Barnes, is the new Proposition 65 regulatory laws that recently took effect.  The laws call for additional warnings and signage under the state’s Safe Drinking Water and Toxic Enforcement Act of 1986.

The laws specifically require store and business owners to list the full chemical name of one or more of the 900+ chemicals published by the Office of Environmental Health Hazard Assessment, the state’s regulatory agency. If OEHHA determines any product contains “a chemical known to the state to cause cancer or reproductive toxicity,” then manufacturers and distributors, along with retailers, all face potential legal exposure.

Failure to comply with Prop 65 regulations can result in fines of up to a $2,500-a-day, and legal settlements that often run $60,000 to $80,000 for beleaguered business owners – simply for not properly displaying, for example, a $40 warning sign.

“Sadly, these types of technical violations of the law, although minor in nature, often result in major economic impacts for businesses owned by immigrants and persons of color, and the communities they serve,” said Barnes. “These Prop 65 laws truly underscore what the study is showing – that our state needs the relief and benefits of tort law reform.”

To view the Citizens Against Lawsuit Abuse 2018 Economic Benefits of Tort Reform Report click here.
     Citizens Against Lawsuit Abuse (CALA) is a nonpartisan grassroots movement of concerned citizens and businesses who are fighting against lawsuit abuse in California. CALA serves as a watchdog to challenge the abuse of our civil justice system, and engages the public and the media to deliver the message that lawsuit abuse is alive and well in California – and that all Californians are paying the price.  www.cala.com 

 

About Stephen Frank

Stephen Frank is the publisher and editor of California Political News and Views. He speaks all over California and appears as a guest on several radio shows each week. He has also served as a guest host on radio talk shows. He is a fulltime political consultant.