“There was no foul. No one had a problem until a lawyer saw this and he filed a suit against us,” Friedman said. “But if we fight it, we’re not going to win.”
This is becoming a common refrain from small business owners in New Jersey thanks to an increasing number of state laws that encourage regulation by litigation.
While the judicial system is well suited for settling disputes between parties; it is not well suited to establishing and enforcing standards for businesses. As a means of regulating the state’s businesses, it is not only a blunt instrument, it is also an extraordinarily unpredictable and expensive instrument. Nevertheless, in New Jersey, litigation has come to operate as the enforcement mechanism for a number of substantive laws.
Statutes that provide for fee shifting drive a significant portion of regulation via litigation. These provisions, which allow prevailing plaintiffs to recover attorney’s fees and court costs, encourage frivolous litigation, discourage settlement, and drive up the cost of lawsuits. Because of this, cases are brought that literally cannot be defended for the cost of the case, and businesses that settle simply become targets for more litigation.
The New Jersey Civil Justice Institute believes that fee-shifting provisions should be used sparingly, only at the request of the bill sponsor, and only in situations where litigation is necessary to resolving a dispute and compensating an injured party.
The credit card receipt class action is just one example of the many lawsuits filed every day that encourages regulation via litigation. NJCJI staff are compiling a list of such lawsuits that we can share with legislators as we attempt to convince them that litigation is not the most efficient or effective means of resolving consumer complaints.
If you have been involved with such a lawsuit, we would like to know so we can add a summary of your experience to our list of examples. Whether you are specifically identified in the summary or prefer to remain anonymous is up to you.
Contact a member of the NJCJI team today to have your lawsuit added to the list.
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