National Federation of Independent Business says tort reform would help Georgia's small businesses

Economics
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Georgia Gov. Brian Kemp | X/BrianKempGA

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The National Federation of Independent Business (NFIB), a small business association, has praised Georgia Governor Brian Kemp for his dedication to addressing lawsuit abuse. Small businesses are disproportionately affected by escalating commercial tort costs.

In a press release, the NFIB stated that Kemp has shown an interest in curbing lawsuit abuse. Hunter Loggins, the NFIB State Director for Georgia, noted that while Kemp hasn't divulged the specifics of his plan, small businesses stand to gain from tort reform. "Our members are encouraged that Governor Kemp has made this is priority," said Loggins. "The cost of defending itself against one bogus lawsuit could be enough to put a small business out of business. We look forward to working with the governor and legislative leaders on this important issue in this year’s legislative session."

According to a report released by the U.S. Chamber of Commerce Institute for Legal Reform (ILR) in December, American businesses have seen an increase in commercial tort costs which disproportionately affect small businesses. The ILR's report found that between 2020 and 2021, commercial tort costs rose nearly twice as much as commercial revenues. During this period, commercial revenues increased by 6.3%, while commercial tort costs surged from $291 billion to $347 billion, marking a 19.24% increase. The report revealed that small businesses accounted for $160 billion of the total $347 billion.

The ILR highlighted in its report that across all sectors, small businesses bear a higher cost of tort liability than larger companies do. It was noted in the report that "while small businesses accounted for just 20 percent of business revenues in 2021, they bore 48 percent of commercial tort costs." The report further mentioned that small businesses form an essential part of American communities and economic growth and thus it is crucial for policymakers to shield them from "excessive tort costs that fall disproportionately on their shoulders."

The NFIB, according to its website, is a nonprofit, member-driven organization established with the aim of advocating for small and independent businesses. Founded in 1943, the organization is based in Nashville, Tennessee and works with legislators in all state capitals as well as Washington, D.C.

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