Every year in the United States, the first full week of October is observed as Lawsuit Abuse Awareness Week. As we enter Lawsuit Abuse Awareness Week 2024, Illinois finds itself at a pivotal moment in its ongoing battle against excessive litigation.
Lawsuit abuse has long plagued the state’s small businesses, burdening them with unsustainable legal costs and stifling their growth. This year, we can celebrate some progress, but it is clear much more needs to be done to protect the future of Illinois’ small businesses.
A major development in 2024 was Gov. J.B. Pritzker’s signing of SB 2979, which introduced much-needed changes to Illinois’ notorious Biometric Information Privacy Act (BIPA). For years, BIPA has been a thorn in the side of businesses, especially small ones, allowing for punitive fines for each alleged violation. In practice, this meant a single technical misstep could result in millions of dollars in damages – a death sentence for many small operations.
The recent amendments to BIPA mark a significant victory for fairness. By addressing the per-instance fine issue, the reforms provide much-needed relief to employers while still preserving individuals’ privacy rights. This balancing act was a difficult but necessary step toward creating a more equitable legal environment in Illinois, and it should be acknowledged as a win for the state’s small business community.
However, the battle is far from over. Illinois’ business climate continues to be weighed down by the phenomenon of “stacked costs.” These costs, compounded by high energy prices, inflated wage requirements, and complex regulations, create an overwhelming burden for small businesses. Each new regulation adds another layer of financial pressure, making it harder for companies to thrive. The excessive litigation risks in Illinois only compound these challenges, leading to lost opportunities for growth, innovation, and job creation.
Small business owners like myself find ourselves navigating a minefield of legal risks. One lawsuit, whether justified or not, can quickly drain resources. Illinois’ legal environment, with its penchant for excessive tort litigation, exacerbates this.
According to a 2023 Perryman Group study, excessive tort litigation cost the state $14.48 billion in direct costs, resulting in the loss of over 215,000 jobs. To put it plainly, every resident of Illinois pays what is effectively a "tort tax" of $1,858 annually. These costs aren’t abstract – they affect the real economy by driving up prices, shuttering businesses, and destroying livelihoods.
While SB 2979 was a step in the right direction, we cannot stop there. There remains significant room for improvement. Addressing stacked costs requires not only tort reform but also a broader rethinking of how Illinois regulates its business environment. We must strike a better balance between protecting consumers and ensuring businesses can operate without the constant fear of being litigated into bankruptcy.
One crucial step would be to reduce the financial incentives for trial lawyers who prey on businesses with frivolous lawsuits. Too many lawyers are more interested in personal enrichment than delivering justice. Illinois’ legal system grants them far too much freedom to pursue excessive punitive damages in cases where the fault is questionable. As a result, businesses often settle out of court simply to avoid the financial ruin that comes with defending a case in an unpredictable legal environment.
If we are serious about fostering a business-friendly environment in Illinois, we need to push for comprehensive reform in 2025. This means continuing to fix punitive laws like BIPA, reducing stacked costs, and ensuring that excessive litigation no longer acts as a barrier to business success. Lawmakers must recognize that every additional regulation and every opportunity for trial lawyers to exploit the system contributes to a business climate that drives jobs and investment out of the state.
As we observe Lawsuit Abuse Awareness Week in 2024, let’s use this moment to remind our elected officials that now is the time for action. Without meaningful changes to the regulatory and legal landscape, Illinois businesses will continue to suffer under the weight of excessive litigation and stacked costs. By implementing sensible reforms, we can pave the way for a more vibrant and competitive economy – one that encourages growth, protects jobs, and supports innovation.
