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New bill may reduce number of frivolous lawsuits

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Though many lawsuits are brought for legitimate reasons, the American legal system has also been plagued by a number of unfounded legal claims. Unfortunately, these claims sometimes lead to mounting legal fees for innocent parties, including independent consultants and small business owners in certain cases.

In order to reduce the number of these claims and the damaging effects they may have on innocent defendants, the Lawsuit Abuse Reduction Act has been introduced by House Judiciary Chairman Lamar Smith of Texas. The Act would mandate that all cases brought to court be previously determined to meet legal interpretations and be based on fact.

"If a court finds that a case doesn't meet this basic standard, then the attorney who filed must be sanctioned or held liable for the costs incurred by the defendant. The bill mandates that sanctions be imposed, but leaves the exact amount up to the court's discretion," said Representative Smith in Politico.

Until this bill becomes law, the number of unfounded law suits brought against innocent defendants may continue to rise and may potentially lead to bankruptcy for some small businesses, even if they win the cases, due to overwhelming legal fees. In order to have some protection against legal-related expenses, small business owners may wish to invest in professional liability insurance.

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