Wednesday, April 29, 2009

It's the Message, Not the Money

Lotsa people are up in arms about SB20, the Democrats' next gift to the trial-lawyer (ambulance-chaser) lobby.

Here's Grothman, via Boots & Sabers:

“This bill can give up to $300,000 in punitive damages to people who claim they were discriminated against while similarly-situated employees in Iowa, Illinois and Michigan would get nothing. Punitive damages in Minnesota would be limited to $25,000,” observed Grothman. “We already have 3,500 claims for discrimination in this state and about 85-percent don’t even meet a probable cause determination. Employers are already expressing frustration at spending countless hours of management time as well as paying thousands of dollars to not have to deal with these lawsuits. This bill will not only increase the number of frivolous lawsuits already filed against Wisconsin employers but put Wisconsin at a further competitive disadvantage compared to other states.”

“At first, I didn’t feel these Democrats understood how common and damaging to business these marginal discrimination claims were, but then, these Democrats exempted school districts, cities, and counties from the lawsuits. The message they sent today is clear, ‘We understand that government cannot be expected to deal with this nonsense, but people who risk their own money going into business will just have to lump it,’” said Grothman. “A more clear dislike for business cannot be imagined.”

Two observations:

1) Most well-run businesses will not lose one of these lawsuits; Grothman says, accurately, that 85% of the cases don't get past the "I'm gonna sue you!" stage.

2) #1 (above) is irrelevant.

What the Leggies accomplished is another marginal attack on predictability, just like Doyle's 'joint/several' switcheroo.

Business likes predictability in the operating environment. Whacking away at predictability is a lot like the process of erosion; you don't really see anything happening; you just note that the big rocks became small rocks.

Having another set of opportunistic and foul-breathed lawyers crawling around your business, looking for an un-crossed "t" or un-dotted "i" simply adds cost. It's that marginal cost, or the fear thereof, which is un-settling.

Then the only question is "when," not "if," the business pulls the plug.

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