Lawsuit abuse is a hidden tax on Alabama’s small businesses and families

Alabama is a state built on the values of hard work, fairness, and opportunity. As the former State Director of the National Federation of Independent Business (NFIB), I heard every day from small business owners who love this state, invest in their communities, and work tirelessly to provide jobs, products, and services that keep Alabama moving forward.

But there’s a hidden cost threatening their ability to succeed, and it’s one we can no longer afford to ignore: Lawsuit abuse. 

When trial lawyers file meritless lawsuits aimed more at generating large settlements than achieving justice, the consequences ripple throughout our economy. It’s a quiet, yet powerful drag on Alabama’s growth, a hidden tax that burdens us all.

According to the Institute for Legal Reform (ILR), lawsuit abuse cost Alabama households an average of $3,286 in 2022. That’s not pocket change. That’s money that could’ve gone toward rent, medical bills, groceries, or saving for college. Multiply that across thousands of families and it’s easy to see how legal system abuse hits where it hurts the most, at the kitchen table.

Small businesses are especially vulnerable. Few have in-house legal teams or deep pockets to fight lengthy court battles. When they’re hit with frivolous claims, they face skyrocketing insurance premiums and legal fees. And those costs don’t just stay on the balance sheet. They get passed along to consumers in the form of higher prices for everyday goods and services.

This issue isn’t about protecting businesses from accountability. It’s about restoring fairness to our legal system so that it works for everyone, not just those looking to exploit it for personal gain. Trial lawyers have had an outsized influence on our courts for too long. It’s time for lawmakers in Montgomery to step up and prioritize reform. The longer we wait, the more small businesses we risk losing, and the more working families will feel the strain.

We can’t build a stronger Alabama on a broken legal foundation. Let’s protect honest businesses, support working families, and promote real justice by making lawsuit reform a legislative priority. The future of Alabama’s small businesses, and the economic health of our entire state, depends on it. Other states have recognized this problem and taken action. It’s time Alabama does too.