During National Small Business Week, CALA Highlights the Economic Impact of Lawsuit Abuse on Small Businesses
FOR IMMEDIATE RELEASE
May 5, 2026
CONTACT:
Victor Gomez
WASHINGTON, DC – During National Small Business Week, people across the country are celebrating the entrepreneurs and local businesses that keep our communities running. From emerging startups to family-owned shops that have been around for generations, these businesses create jobs, serve their neighbors, and help drive our local economies.
For more than 60 years, the U.S. Small Business Administration (SBA) has led this annual recognition, highlighting the important role small business owners play in communities nationwide. National Small Business Week 2026 will take place May 3–9, recognizing the hard work and dedication of businesses of all kinds.
But behind the celebration, many small business owners are dealing with challenges that aren’t always discussed. Lawsuit abuse quietly drives up costs and makes it harder for small businesses to expand, innovate, and thrive.
“Small business owners are focused on serving their customers and communities, but too often they are burdened by the anxiety of being dragged into costly and unnecessary lawsuits,” said Victor Gomez, Executive Director of Citizens Against Lawsuit Abuse. “When the system is taken advantage of, it’s small businesses and the communities they serve that end up paying the price.”
For a small business, a single lawsuit can lead to anything from a higher grocery bill to increased property taxes. Unlike big companies, most small businesses don’t have the time or resources to fight back. Instead of focusing on innovation and growth, they are often forced into settlements they can’t afford.
Recent research from The Perryman Group finds that excessive tort costs continue to put pressure on the U.S. economy, making life even more unaffordable for small businesses and their communities. According to the analysis, litigation-related costs place a significant burden on the U.S. economy each year, with $397.2 billion in direct costs and an additional $602.3 billion in lost economic output. These impacts ripple across industries, contributing to the loss of more than 5 million jobs nationwide.
In total, these costs amount to a hidden “tort tax” that costs individuals $1,771 per person or $5,579 per family annually. These costs don’t appear as a line item on your monthly bills, but they are baked into small businesses' everyday expenses, leading to higher pricing to cover insurance, supplies, and other basic costs.
“These findings are a clear reminder that excessive litigation affects the entire economy,” said Gomez. “Lawsuit threatens jobs, slows economic growth, and creates real challenges for small businesses trying to succeed.”
A fair legal system is important, and CALA is advocating for one that prioritizes justice over profits. If the system continues to be abused, it can create real problems for small businesses and the communities that rely on them.
During National Small Business Week, CALA is encouraging policymakers and community leaders to take a closer look at how lawsuit abuse is impacting small businesses, affordability, and economic stability, and urges them to support policies that ensure they have a fair shot at succeeding without unnecessary costs holding them back.
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About Citizens Against Lawsuit Abuse (CALA)
Citizens Against Lawsuit Abuse (CALA) is a nonpartisan, grassroots movement working to end rampant lawsuit abuse across the United States. CALA advocates for commonsense legal reform measures by educating the public about the devastating, real-world costs of lawsuit abuse on working families and small businesses.
About The Perryman Group (TPG)
An economic and financial analysis firm, The Perryman Group (TPG), provides clients with well-documented, carefully considered answers to even the most complex questions. For more than 30 years, The Perryman Group has met the challenges of thousands of clients through a systematic approach and a level of performance that assures a consistent standard of excellence. The firm has been involved in scores of major events shaping the economic landscape, from crucial corporate locations to landmark legislation to important regulatory policies to notable judicial decisions.