First Step in Fighting Lawsuit Abuse – Risk Management



Published reports on two southern California media Web sites illustrated the polarizing effects of laws affecting business. They’re still applicable now even though they were published in November 2011.

The first article in Signon San Diego, “Businesses fight ‘abusive’ lawsuits, explains the fears and concerns of many small businesses. Written by Tanya Mannes, it describes how a legal-reform organization is leading the fight against what it terms as lawsuit abuse in California.

A group calling itself California Citizens Against Lawsuit Abuse (CALA) has issued a report showing what it believes are large number of disingenuous lawsuits, and is lobbying the California Legislature for legal reforms.

Ms. Mannes quoted a CALA regional director, Maryann Maloney Marino:

“Anybody can be subject to a lawsuit in California…More than 1.4 million lawsuits were filed last year alone, but that does not take into account the hundreds or thousands of demand letters businesses get.”

As part of its marketing, the group launched a Facebook page.

Yes, as a biz coach, I’m empathetic for business having to cope with the litigious environment in California and across the nation.

Sexual abuse case

On first glance, a second article would seem to support the group’s cause. The CBS headline reads: “Jury Awards Woman $65M In Punitive Damages.”

However, the article – one of many on the case – explains how and why jurors reacted to a healthcare company that employed a male nursing assistant who sexually abused a patient. Encino-Tarzana Regional Medical Center and its former owner Tenet Healthcare Corp. were ordered to pay the victim $2.36 million in compensatory damages.

The article also relates how the jurors in their deliberations were so deeply moved they arrived at the $65-million figure in punitive damages.

“Anybody can be subject to a lawsuit in California…More than 1.4 million lawsuits were filed last year alone, but that does not take into account the hundreds or thousands of demand letters businesses get.”

Little wonder. The article indicated the jurors weren’t convinced the company was doing its best as a healthcare organization – were they thinking this was an example of the term, oxymoron?

To exacerbate the situation, the employee-predator, a fugitive, was cited on Fox television’s “America’s Most Wanted” two years in a row.

Two key questions

Moreover, the case raises salient questions – for starters: What about the hospital’s recruitment policies, background checks, and management procedures?

And why was a male nursing assistant even allowed intimate access to a female patient? Other professions, like police agencies and physicians, have noteworthy safeguards in gender protections.

The lesson? To prevent being hit by a lawsuit, do your due diligence in risk management.

Conduct a SWOT analysis of your strengths, weaknesses, opportunities and threats. Then, take the necessary proactive steps for good stewardship. Document everything for a paper trail.

You’ll sleep better. More importantly, it’s the right thing to do.

From the Coach’s Corner, here are other employer tips:

“The first step in the risk management process is to acknowledge the reality of risk. Denial is a common tactic that substitutes deliberate ignorance for thoughtful planning.”

-Charles Tremper


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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.






Seattle business consultant Terry Corbell provides high-performance management services and strategies.