A majority of the state’s small business owners want the Legislature to address legal reform; South Jersey business owners most likely to be taken to court
TRENTON, N.J. – A survey conducted by the Eagleton Institute at Rutgers University showed that the majority of New Jersey’s small business owners aren’t happy with the state’s culture of litigation.
84% of those surveyed rate the state’s business climate as “fair” or “poor,” and an astounding 87% say they want the Legislature to prioritize legal reform. 24% of businesses statewide have been threatened with litigation in the past five years, but that number jumps to 40% among South Jersey businesses. Overall, 1-in-4 South Jersey small businesses have actually been brought to court during the past five years. The chances of courtroom litigation also increase with a business’s longevity and growth.
“It’s clear that New Jersey’s liability laws put the state at a disadvantage,” said Marcus Rayner, executive director of the New Jersey Lawsuit Reform Alliance. “But that disadvantage is exacerbated if a business happens to operate in the suburbs of Philadelphia.”
Two-thirds of South Jersey businesses saw an increase in their liability insurance premiums during this time period, even if they haven’t been sued.
“Every time a lawsuit is filed against one of New Jersey’s small businesses, every business’s insurance costs threaten to rise. Business owners are telling us that even if it’s not their business being sued today, they still might incur costs and will need to make judgments about where to invest their business’s resources.
“This is not the kind of restraint we ought to have in a state with a 9.2% unemployment rate.
“When 87% of small business owners in a state want change, it’s time for the Legislature to act.”
The survey was conducted by the Eagleton Institute of Politics at Rutgers University. Full results can be found on NJLRA’s website, http://njlra.org.
New Jersey’s Small Businesses Want Legal Reform
- 87% of New Jersey’s small business owners say legal reform should be a priority for our state legislature.
- 84% rate the state’s business climate as “fair” or “poor.”
- 73% say that ads from personal injury lawyers encourage people to sue.
- Success can make a business become a target; the larger or more successful a small business becomes, the more likely it is to be sued.
- Retailers are most likely to say New Jersey’s laws and regulations make it easy to file a lawsuit.
- 24% of businesses statewide have been threatened with a lawsuit in the last five years. This number is 40% among South Jersey businesses.
- Among the businesses still standing after a lawsuit, 4-out-of-10 limited plans for expansion. Two-thirds raised consumer prices or discontinued products or services. Another one-third considered leaving New Jersey altogether.
- Small businesses owners are concerned about litigation costs, even if they aren’t being sued themselves. 13% of small businesses have had a lawsuit filed against them by a client or customer in the past five years. Unsurprisingly, liability insurance increased for at least 60% of New Jersey’s small businesses during the same time period.
- Nearly one-in-three small business owners think it is more likely than not that they will be sued in the next five years.
- Of the small business owners who were sued in the past five years, many were forced to make changes to their business:
-45% limited plans for expansion;
-32% decided to discontinue products or services, layoff employees, or cut employee hours;
-approximately one-in-five raised prices for their products and services;
-16% considered closing their business entirely.
(and these are just the small businesses which survived litigation)
Source: Rutgers-Eagleton Survey, 9/2011
On the web: http://njlra.org