Failed legal system is crippling Illinois business

  • Bob Goray

    Bob Goray

 
By Bob Goray
Guest columnist
Posted6/9/2022 1:00 AM

As a small-business owner for nearly 30 years, I can report the outlook for small businesses in Illinois has never looked worse.

I started my career working my way through college in a steel mill nearly 50 years ago. I have since worked my way up in the building façade repair and restoration industry ever since -- I have lived the American Dream.

 

Unfortunately, I've never been more concerned for Illinoisans who hope to do the same, especially young workers like I was, just trying to better their lives and secure a promising future for themselves and their families.

We all know our country currently faces some economic challenges with supply chain issues, inflation and a labor shortage, but Illinoisans undoubtedly have it worse. Our lawmakers and legal system continue to stack on cost after cost, killing jobs and forcing businesses to close down or flee for greener pastures.

One of the most anti-business, anti-jobs pieces of legislation, Senate Bill 72, the Prejudgment Interest Act, puts defendants on the hook for the nation's highest interest rate -- 6% -- on future damages the day a lawsuit is filed. So, before a judge even hears a case or defendants can make their case in court -- where everyone is supposed to be innocent until proven guilty -- they are forced to begin putting money aside for legal expenses.

Of course, this is a pot of gold for plaintiffs' lawyers, who can file meritless lawsuits to force settlements, so long as they can spike a defendant's potential losses to a threshold they can't afford. Essentially, by tacking on interest, lawyers can tell businesses, "Look, you will have to pay this (higher) amount if you lose, but if you pay us this (slightly smaller) amount right now, we can settle the case and be on our way."

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The sad truth in this situation is that many of the businesses accused of frivolous violations are innocent, but they can't risk paying the higher amount. So they are forced to settle, and the lawyers continue to generate millions for themselves by exploiting the new loophole.

These attorneys couldn't care less about the merits of the case. Any excuse to sue and scare businesses into free money requires virtually no effort, and the case never has a chance to be exposed as a sham.

Illinois also has some of the most restrictive workers' compensation laws in the country. When a dispute arises in the workplace, employer and employee are barred from working together to achieve a mutually agreed solution. Instead, the case must go to court, where lawyers dilute any damages by collecting fees, plaintiffs and defendants are forced to pay court costs and a solution is eventually agreed to that is far less beneficial for anyone.

Our legal system costs Illinois' families and businesses serious money and the numbers back it up. Last year, excessive tort litigation cost our state 192,605 jobs and nearly $12 billion in personal income. Even worse, each Illinoisan pays an average "tort tax" of $2,094 per year without even knowing it. Naturally, when businesses are forced into unnecessary legal disputes, these must be paid for somehow. Usually, prices go up, employees are let go and services or hours are restricted. In the worst cases, businesses close altogether.

                                                                                                                                                                                                                       
 

But things don't have to stay this way. So far, lawmakers' "pro-consumer, pro-small business, pro-worker" legislation has had the opposite of its intended effect. However, we can use the failures of the current policies to shape how we legislate in the future. Employees need autonomy and businesses need protections against frivolous lawsuits and added costs that threaten to take them out before they have a chance to succeed.

Illinoisans cannot afford to suffer the consequences of a failed legal system any longer.

• Bob Goray is the owner of J.S. Goray Inc., a building façade restoration and repair company in Wauconda and past chair of the Illinois Leadership Council for NFIB.

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