Monday, September 24, 2012

Frivolous Lawsuits - Cost Billions Of Dollars

Every year, companies face Frivolous Lawsuits that cost global businesses billions of dollars.   Many come from employees terminated for legitimate cause, that then seek protection under various laws.   Others tie to claims of hiring discrimination that often have no basis in fact.  There are aggressive attorneys that live on these cases that rarely go to trial; but instead are settled out of court as nuisance lawsuits for relatively small amounts of money just to make them go away. 

Nevertheless, a tremendous amount of time and resources are wasted on these cases that must be taken seriously.   In order to avoid employee practice legal claims, a company's Human Resources department must document all employee actions involved with Recruitment, Selection, Hiring, Performance Evaluation and Termination.   Obviously, all laws must be complied with related to employees, no matter how onerous, or ridiculous.   This adds to the cost of doing business and ultimately impacts monies available to pay compensation and benefits for employees on the payroll. 

Occasionally, companies face lawsuits related to their business practices.   Again any company perceived to have deep pockets is a target.   Again, most of these cases rarely make it to court.   Attorney Ambulance Chasers are always looking for a quick and easy settlement that they can accomplish in a few months to a year, rather than deal with a court case that could take years to achieve.   This is the case because these attorney's usually work on contingency where they earn 30 - 50% of the settlement, rather than an hourly fee. 

Frivolous Lawsuits are an unfortunate cost of doing business.   Business always pushes for Tort Reform to prevent cases that have no merit, or basis in fact.  Some American states and some countries are better than others related to limiting Frivolous Lawsuits.   Frivolous Lawsuits cost business billions of dollars every year that are then not available for other investments in business development to create jobs.   This is a serious problem that has only gotten worse over the years.  Government should act to limit Frivolous Lawsuits to encourage economic growth and job creation. 

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