Survey of New Jersey small business owners shows that increase in liability costs are causing them to scale back operations; 20% consider relocating out-of-state. 

TRENTON, N.J. – New Jersey’s small business owners are feeling the sting of too much litigation, according to a Monmouth University survey.  NJLRA executive director Marcus Rayner announced the sobering survey results today at a State House news conference. 

 “In a weak economy, New Jersey should be doing all it can to improve our state’s business climate and create jobs,” said Rayner.  “Our small businesses are crying out, and the message they’re sending us clear: New Jersey needs to get serious about tort reform.

Liability insurance premiums have increased an average of 55 percent over the past five years.  Small business owners surveyed pointed to a number of reasons for the increase in liability costs, including the ease of taking misunderstandings to court and the possibility of large cash settlements.

“Seven-in-ten small business owners now fear New Jersey’s culture of litigation, and with good reason,” said Rayner.  “Our Consumer Fraud Act is abused to the point where a customer can sue before asking for a refund.  This shows that things have gone far beyond ‘the customer is always right.’  Small businesses are falling victim to a legal loopholes and sacrificing jobs, innovation, and economic growth in the process.

Assemblywoman Amy Handlin (R-Monmouth) agrees. “New Jersey consumers are the ultimate victims of this overly litigious culture,” she said. “When any businessperson can be dragged into court on any day, for virtually any reason, it chokes off innovation, expansion and competition.”

The study was conducted by the Monmouth University Polling Institute and interviewed owners and senior operators of small businesses (2 – 50 employees) in New Jersey in July 2010.  The full survey results are available on NJLRA’s website, at

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