More Regulations = More Litigation

California never met a tax or regulation that it did not like. This is probably one of the reasons our state is in the situation it is in. However, people rarely think of how California’s regulations drive costly out-of-control litigation that is hurting job creation.

The 2011 Fulbright Litigation Trends Survey, published in mid-October, helps shed some light on this subject. According to the survey, the vast majority (92% of corporate counsel polled in the U.S.) predict litigation will either rise or remain the same in the next 12 months.

What’s driving this expected increase in litigation? Regulations. Since 2009, the number of companies reporting that at least one regulatory proceeding had been filed against their company in the past year has risen from 34% to 40%.

It is also interesting to see where companies feel the biggest threat. Companies in the U.S. see the Department of Justice, State Attorneys General, OSHA and the EPA as the most likely entities to investigate them. They also see labor and employment litigation going up, up, and up: 37% of the respondents reported a jump in wage and hour lawsuits.

It’s a no-brainer that when companies spend more on litigation, they have less to spend on hiring new workers. This is why CALA is committed to make legal and regulatory reform major political issues in the election next year. Enough with the lawsuits, let's get people back to work.

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