Heinrich, Joyce: Lawsuit Abuse Awareness Week — protecting Arizona's small businesses

Cristian Baitg/Metro Creative Connection

As we observe Lawsuit Abuse Awareness Week, Oct. 7 to 11, it's crucial to reflect on the state of Arizona’s civil justice system and its impact on our small businesses and economy. We must remain vigilant to maintain a balanced legal environment that protects both plaintiffs’ rights and defendants’ ability to operate without fear of frivolous lawsuits.

The economic impact of excessive tort costs in Arizona is staggering. Each Arizonan pays a hidden “tort tax” of $1,088.57 annually due to excessive tort litigation costs. This translates to a loss of more than $2.2 billion in tax revenues across federal, state and local governments in Arizona. More alarmingly, these costs result in an annual loss of 72,259 jobs and more than $5 billion in personal income for hardworking Arizonans.

Recent data from Arizona courts paint a concerning picture. In fiscal year 2023, a total of 1,664,337 cases were filed in Arizona courts — an average of 6,657 cases every working day. While not all of these are related to tort claims, the 25.3% increase in civil case filings suggests a growing litigiousness that could threaten our state's business climate.

Arizona’s unique legal landscape presents both challenges and opportunities. The state constitution prohibits limits on many types of lawsuits and damages, making us more plaintiff-friendly than many other states and leaving small businesses potentially vulnerable to excessive judgments.

The threat of lawsuit abuse is a concern for many entrepreneurs and small business owners across Arizona, some of which may even hesitate to expand or innovate, fearing the risk of litigation. This apprehension deters business growth, limits job creation and economic development throughout the state.

To address these concerns, reasonable and balanced reforms are essential. Past efforts to introduce “innocent seller” legislation, which would protect retailers from liability for defects in products they merely sold, should be enacted into law. Additionally, we should examine the growing practice of third-party litigation financing, which can incentivize unnecessary lawsuits and prolong litigation.

Our courts also play a crucial role in maintaining a balanced civil justice system. As voters, we have a responsibility to stay informed about candidates up and down the ballot, which includes judicial elections, not letting them be politicized, and we must support candidates who understand the importance of fairness and efficiency in our court system.

As we mark Lawsuit Abuse Awareness Week, we call on all Arizonans to support legislative efforts that promote a balanced civil justice system and recognize that a fair legal environment benefits everyone — providing justice for the truly injured while protecting businesses from abusive lawsuits.

Arizona has the potential to be a model for sensible tort laws that protect both consumers and businesses, and voters have a critical responsibility in shaping our judicial landscape. It's essential to stay informed and participate actively in these decisions. By doing so, we can work together to ensure that Arizona's civil justice system serves its intended purpose: to provide a fair forum for resolving disputes, not a lottery for opportunistic litigants and their attorneys.

Chad Heinrich is the Arizona state director of the National Federation of Independent Business and managing partner of Heinrich Public Affairs in Phoenix. Tiger Joyce is president of the American Tort Reform Association. Reader reactions, pro or con, are welcomed at AzOpinions@iniusa.org.