Business owners are obliged to follow the rules of the Americans with Disabilities Act as well as a lesser-known act for California, the California Unruh Act (Unruh). Both allow members of the public to a claim alleging they have been discriminated against. It’s a broad law, and it’s one that can, and has, negatively impacted small businesses.
What effect is this having on businesses?
When a small business has to deal with any lawsuit, large or small, it may be more likely to settle before trial just to avoid the cost of taking the case to court. In this way, in our view, there are some attorneys representing alleged victims who are actually abusing the system. These law firms sometimes have clients who intentionally look for properties that may not be up to the most current building code as it pertains to the ADA with the idea of filing a lawsuit regardless of how strong or weak the lawsuit might be and use the lawsuit in an attempt to gain a quick settlement. Since ADA cases under the Unruh act allow a Plaintiff to obtain a minimum award of damages plus a judgment where the business or property owner is required to pay the Plaintiff’s legal fees. Armed with this threat, Plaintiffs are usually about to convince the businesses to pay a settlement, knowing the business will often pay a settlement even when it is likely they would win the case if they took the case all the way to trial since the cost to go to trial even with a small risk of losing is far more expensive than paying the settlement.
What’s the problem with ADA and Unruh lawsuits for the average consumer?
The greatest issue is that small businesses often have to raise their prices to make up for financial losses. This means that many of the goods and services in California will continue to rise in price.
In some situations, a very small business could be forced to close down when the cost of defending and settling these ADA cases is combined with other losses from lost sales from Covid-19.
Both ADA and Unruh lawsuits may be harmful to your business. If you’re facing a lawsuit, it is in your best interests to defend against it, though it could be costly. Frivolous claims hurt your business as well as others in the state, so it is worth taking a stand.