This opinion-editorial originally appeared in the August 24, 2016 print edition of the Winchester Sun.
As a small business owner, of 62 employees and 66 years of being in existence, I am passionate about my company and my community. Everything I do is focused on providing the best product for our customers, the best work environment for our employees and the best life for my family.
For the past 37 years, I have led business operations at Baumann Paper Company in Lexington. Through my membership with the Kentucky Chamber, I have met other small business owners who have faced, or are facing, contentious and often meritless legal battles on a daily basis.
Kentucky does not have a tort system in place that caps punitive lawsuits. Lack of tort reform in Kentucky fosters inconsistency and creates an environment where businesses have unknown potential risks. This puts those businesses, and Kentucky as a whole, at a disadvantage to surrounding states where tort reform and other policies to improve legal environments have been adopted.
There are certainly cases where businesses act or operate unethically, putting their customers or employees in danger. When that happens, justice is deserved, required and should be sought out.
But what about those cases that don’t have merit? The ones that greedy personal injury lawyers file in bulk quantities with one objective – to get rich on the back of a legal system that needs some mending.
Try to picture this. You’ve invested everything you have - your savings, your passion, your time – in a start-up company in your hometown because you believe in your vision, and you believe in your team. Then one day all that changes when someone files a lawsuit against you and your company.
If you’re like most business owners, your insurance company urges you to settle, because fighting and fully litigating a lawsuit is an expensive endeavor even if you’ve done nothing wrong. But, you worry that settling—which most perceive as an admission of guilt—could ultimately alter the reputation of your small business among your community and more importantly your customers.
Almost every day, I wonder if I am going to receive that phone call. It’s the phone call with the word you never want to hear as a small business owner – lawsuit. The lawyer’s billing clock immediately starts rolling and you start stressing as you try to protect your company, your employees and your family.
Why should I live in fear of this reality, particularly if I’ve done nothing wrong? Any lawsuit can take years and a lot of money to defend, whether you are guilty or not, and that translates into time and resources that many small businesses simply do not have.
Each and every day when I turn on the television or listen to the radio on my drive to work, I see a myriad of commercials and billboards with misleading personal injury lawyer ads. In fact, a recent study from the U.S. Chamber's Institute for Legal Reform found that Louisville is the 7th largest market for trial lawyer advertisements, while being only the 49th largest media market in the nation.
Clearly, these lawyers know where to spend their ad budgets, in a state with no tort reform measures to hold them back.
Enacting a tort reform is not about taking away Kentucky citizen’s rights, access to courts or impacting due process under the law. It is purely about ensuring small businesses can operate in a consistent, transparent environment with the ability to hedge against risk.
This is not only an important component to encouraging business growth within our state, but is critical to encouraging new companies to locate to Kentucky.
Enacting tort reform would also mean that hard-working, small business owners in Kentucky can sleep soundly, knowing that our livelihoods are not unnecessarily jeopardized by an inconsistent system. Let’s put politics aside, realize that small business owners are not “scared” of Kentucky’s courts, and pass equitable legal reforms that will benefit all Kentuckians.
Fred Baumann is Chairman of the Board of Baumann Paper and the Ky. Chamber Small Business Policy Council