Inflation may be one of the biggest challenges facing Alabama's small businesses, but unjust lawsuits are making the situation even worse.

Many lawsuits are legitimate — you have a constitutional right to seek justice if you've been wronged — but some lawsuits are filed for the wrong reasons — because someone is looking to make money.

Small businesses have low profit margins, so instead of using their limited resources to run their business, business owners are forced to pay thousands of dollars in legal fees and sometimes settle for large amounts of cash.

This makes it harder for small businesses to grow and create jobs, and it drives up insurance premiums. Insurance companies are factoring the cost of potential lawsuits into their premiums, which results in higher premiums for all Alabamians.

That's why Alabama's small businesses need their lawmakers to support House Bill 420 and Senate Bill 293. Litigation Fairness Act of 2024.

Our current legal system gives too much power to plaintiffs' lawyers who make money by suing companies. House Bill 420 and Senate Bill 293 would not stop people who have been genuinely injured from suing, but they would ensure that both sides are treated fairly.

The bill would put a spotlight on third-party finance companies that foot the bill for legal fees they don't own. It would also ensure that experts invited to testify know what they're talking about. It would also require truthfulness in advertising, so lawyers can't exaggerate how much money they've won in court.

Right now, litigation abuse is like a hidden tax on everyone: According to a 2021 report from the Perryman Group, litigation abuse costs Alabamians an average of $731 a year, and the average family $1,016 a year.

Simply put, litigation abuse leads to higher prices for everyone who lives here, but it gets even worse: Higher insurance premiums and cash settlements force employers to make the difficult decisions of raising prices, laying off employees, or even closing down their businesses.

Just the threat of a lawsuit can make doing business scary. Starting a business while worrying about being sued is hard for a new entrepreneur. And with inflation driving up prices, it's even harder for small businesses to make ends meet.

Alabama's legal system should be a level playing field for everyone.

Rosemary Elebash is the Alabama state director for the National Federation of Independent Business (NFIB).