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Florida’s Courthouse Sharks

We have great beaches and warm, clear water in Florida. We also have sharks.

Most of the time, sharks just do their sharky thing, swimming around, eating fish and maybe nibbling the occasional tourist before deciding that the latter doesn’t add anything useful to their diet. We coexist well with most of the sharks, who are on the whole no more than an occasional nuisance. Sometimes, however, shark bites can be painful and bloody. No one cares for the most aggressive specimens.

Aggressive sharks are increasingly a problem in South Florida’s courthouses as well, where small businesses are doing most of the bleeding.

Whether in the water or in the courtroom, there is no point in blaming sharks for behaving like sharks. That’s just what they do. Keeping the meanest sharks away is largely a matter of not putting bait in the water.

In South Florida’s case, the Americans with Disabilities Act is the shark bait. The problem is the law, not the sharks who are feeding on it.

According to the South Florida Sun-Sentinel, more than one in five federal disabled-access lawsuits originated in the Southern District of Florida in 2013. Local business owners have complained that such suits are less concerned with businesses becoming compliant than with quick payouts to make the suits disappear. The ADA, which was enacted in 1990 with the intention of letting individual citizens sue if businesses violated the law, has created a mechanism for such quick-cash settlements.

Civil enforcement provisions exist because they allow private parties to do the government’s job when government resources are limited or priorities lie elsewhere. Of course, private enforcement also leads to private enrichment, albeit in the name of the presumed public good. When, as here, the stakes are small and the majority of suits are of the “nuisance” variety, the only private parties getting enriched are the attorneys, and the public good accomplished is purely theoretical.

While South Florida lawyers may be among the worst offenders, they are by no means alone. A Eureka, Calif., attorney recent became the target of a public protest due to the hundreds of ADA lawsuits he has filed - 23 cases in 2013 alone. In 2012, The New York Times observed that the city’s age and architectural quirks made it a tempting target for ADA lawsuits, too. In both cases, as in Florida, it was the lawyers seeking out potential plaintiffs rather than the reverse. There was also generally a large difference between the restitution made to the plaintiffs and the fees pocketed by their attorneys.

It is easy to advocate stripping the option of private enforcement from the law. I like the idea, with limitations. For example, we should retain the right for workers and tenants to force employers and landlords to accommodate disabilities in properties that these individuals must use on a regular basis. The law does do some good, and in cases like these, it gives recourse to individuals who may not have many other options. But such cases are not the ones drawing the legal sharks.

It doesn’t matter much whether or not I think limiting private action is a good idea, regardless. As long as Democrats, largely supported by trial lawyers, control either house of Congress or the presidency, such a change probably is not going to happen.

So how about going the other direction? What if we required that any lawsuit brought under the ADA either go to trial or be settled for a substantial minimum sum, maybe $250,000 or more. Likewise, require any jury award to meet or exceed that amount. How would such a requirement help small business? By creating incentives for businesses to get liability insurance, and for insurance companies to fight such suits rather than settle. The last thing the plaintiffs’ attorneys want is to go to trial, and the likelihood that a jury would make a neighborhood bar pay $250,000 over a loose floor mat is infinitesimal. Nuisance suits would go away just as surely as if they were banned, while legitimate complaints could still be heard.

What will not work is expecting attorneys to change their own behavior without some change in the law first. As Martin J. Coleman, a Long Island-based attorney, told The Times, “As a private attorney, every lawsuit that I file is to make money, because that’s how I make a living.” Sharks are sharks.

Yet expecting sharks to follow their natures doesn’t mean resigning ourselves to being bitten. Businesses in shark-infested locales should band together in associations, or via insurers, to fight such suits. Settling is easier in the short term, but it costs everyone when it serves as blood in the water. Predators economize their efforts; they always go after the easiest prey. Make yourself a more challenging target, and the sharks will swim somewhere else.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us,” and Chapter 4, “The Family Business.” Larry was also among the authors of the firm’s book The High Achiever’s Guide To Wealth.

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