Cost Of Litigation To Small Business

Litigation hurts small business in more than just financial ways, a new Advocacy study has found. Since most small-business owners are personally invested in their businesses, the toll of being sued also includes substantial emotional hardship and changes in the way the business operates.
The Impact of Litigation on Small Business was written by Klemm Analysis Group with funding from the Office of Advocacy.
The study found most of the participants had to recoup their litigation losses by cutting expenses or by having to expend even more funds in a search for customers. These costs were absorbed by the business because increasing prices was seen as a competitive disadvantage and used as a last resort.