(April 1, 2004) A recent survey of California’s small businesses found that the majority favor reforms such as the California Chamber-led effort to pass an initiative to stop shakedown lawsuits.

The survey found that 80 percent of small businesses in the state support a ban on trial attorneys who file frivolous lawsuits under California’s Unfair Competition Law.

“California businesses already face the highest workers’ compensation and unemployment insurance taxes in the nation. They don't need or want the added cost of fighting frivolous lawsuits. This survey makes clear that the state’s small business community is in strong support of reforming the unfair competition law to prevent abuse by unscrupulous attorneys,” said Chamber President Allan Zaremberg.

The Chamber is co-chairing the drive to place on the November ballot an initiative to amend the state’s unfair competition law, Business and Professions Code Section 17200, to prohibit the filing of frivolous lawsuits.

Through a legal loophole in Section 17200, lawyers are able to file lawsuits mainly against small businesses and demand fees with no real client or proof of harm.

Reform of Section 17200 would amend the current code so that private lawyers could no longer file lawsuits without a client or proof of financial loss. The initiative will still protect consumers from unfair competition and deceptive advertising, as well as provide relief to businesses from the frivolous lawsuits.

The Chamber has been working with the Californians to Stop Shakedown Lawsuits coalition to gather sufficient signatures to qualify this initiative for the November ballot. The campaign’s goal is to gather 600,000 signatures by April 16.

The Chamber is urging California businesses to help by gathering signatures in support of the initiative.

To request a petition or for more information on this initiative, visit:www.stopshakedownlawsuits.com

The survey was conducted by the Sacramento-based National Federation of Independent Business.

Staff Contact: Sara Lee