Lay Down the Law

A new bill aims to shoot down frivolous lawsuits.
Magazine Contributor
2 min read

This story appears in the March 2005 issue of . Subscribe »

Business owners afraid of losing big in a lawsuit should feel safer: A bill passed by the U.S. House of Representatives in September takes aim at nuisance lawsuits and class-action suits. At press time, the Lawsuit Abuse Reduction Act of 2004 (LARA), H.R. 4571, was awaiting action by the Senate Judiciary Committee.

Lawsuits in the United States are subject to the Federal Rules of Civil Procedure, which dictate who is responsible for what, how a lawsuit is to proceed, and what lawyers may do. LARA gives teeth to Rule 11, designed to stave off frivolous lawsuits. Under LARA, a lawyer who files a groundless lawsuit or presents a pleading or motion with the intent of harassing or causing unnecessary delay faces sanctions.

"Reinstating Rule 11 will hold personal-injury lawyers accountable to basic, fair standards," says Sherman Joyce, president of the American Tort Reform Association. The rule will also apply to any state case that affects interstate commerce, such as by threatening jobs and economic losses in other states.

The act would also rein in forum shopping--a practice in which lawyers file personal-injury lawsuits wherever they think they can win. Under LARA, plaintiffs may only sue where they live, where they were injured or in the defendant's principal place of business.


Jane Easter Bahls is a writer in Rock Island, Illinois, specializing in business and legal topics.

More from Entrepreneur

Are paying too much for business insurance? Do you have critical gaps in your coverage? Trust Entrepreneur to help you find out.
Get Your Quote Now

One-on-one online sessions with our experts can help you start a business, grow your business, build your brand, fundraise and more.
Book Your Session

Whether you are launching or growing a business, we have all the business tools you need to take your business to the next level, in one place.
Enroll Now

Latest on Entrepreneur

My Queue

There are no Videos in your queue.

Click on the Add to next to any video to save to your queue.

There are no Articles in your queue.

Click on the Add to next to any article to save to your queue.

There are no Podcasts in your queue.

Click on the Add to next to any podcast episode to save to your queue.

You're not following any authors.

Click the Follow button on any author page to keep up with the latest content from your favorite authors.

It Started As a Joke and Turned Into a Startup That Raised $1 Million in Funding