Client News

Tallahassee Democrat: Jay Timmons and Tom Feeney: Jackpot justice is bad for business

Monday, July 29, 2013

The United States leads the world in a number of categories.

While most of our achievements are worth celebrating, others are not. We have the highest corporate tax rate among industrialized nations, with a top rate of 35 percent. And we’ve earned another dubious distinction: Our legal system is the world’s costliest.

Lawsuit abuse saps resources that businesses could otherwise use to create jobs or expand. In fact, liability costs in the United States amount to roughly 2 percent of GDP.

Runaway tort costs are especially costly to manufacturers and contribute to the structural cost disadvantage facing manufacturers in the United States. Today, it’s 20 percent more expensive to manufacture in this country than it is among our major competitors, according to the Manufacturers Alliance for Productivity and Innovation (MAPI) and the Manufacturing Institute.

Our tort system is intended to ensure victims receive just and fair compensation and also to deter future wrongful acts. However, these days, the tort system is often nothing more than a trial-lawyer bonanza. One need only look to the Gulf Coast for the latest example.

Trial lawyers have pounced on BP in the wake of an egregious misreading of the company’s settlement agreement with businesses affected by the 2010 Deepwater Horizon oil spill.

The oil spill hurt the state’s economy and imposed serious hardships for many families. To its credit, BP was quick to make amends, paying more than $10 billion to satisfy claims of individuals, businesses and the government and more than $14 billion for cleanup.

This misreading has opened the door to widespread abuse and opportunism. Trial lawyers see a multinational business with deep pockets, and they want to cash in.

Trial lawyers are actively recruiting businesses to make claims against BP even if the spill didn’t harm the businesses. That’s not fair to businesses and individuals who were actually hurt. While some may see BP’s deep pockets and a potential windfall for themselves or their business, they are hurting more than a multinational energy company. In the long run, all businesses could pay the price.

When people abuse the legal system, the economy suffers. Entrepreneurs are less likely to invest if trial lawyers can rush in and wipe away years of hard work. That’s exactly what happened to Blitz USA, a manufacturer of portable gas cans in Oklahoma. After facing a barrage of lawsuits and the resulting costs, the company concluded that — win or lose — it couldn’t afford to stay open.

Businesses in Florida shouldn’t have to worry if they could be next. The state has made significant strides in improving its legal climate over the years. Floridians shouldn’t let an unscrupulous tort bar turn back the clock.

Jay Timmons is president of the National Association of Manufacturers ( Tom Feeney is president of Associated Industries of Florida (

« Return to News