Why Get Involved in Litigation

Why waste money shooting yourself?

Over the past several years disturbing situations have come to my attention from the fitness and recreation industry; both wasting time and money. Both are identical in their nature. Someone tried to put a competitor else out of business by using the legal system. In short it doesn’t happen, won’t work and only hurts the industry.

In the first case, I was handed press releases by a manufacture touting their president’s work as an expert witness, against competitors. The president of the company issuing the press release had been testifying as an expert witness in lawsuits against his competitors. It seemed that the manufacture’s product claimed to be safer, (and might be). The president of the company had been testifying for plaintiffs injured with products manufactured by competitors that failed. The press release touted that after the president’s testimony the defendant’s quickly settled the case. The press release touted the president as a hero for helping to make the industry safer, or actually by saying his product was better.

In the second case, one trade organization attacked another trade association. One association attempted to eliminate another association’s ability to be “sanctioned” by a third association. The third association by sanctioning the first association had given the first association credibility. The second, aggressive association received the sanctioning also, then attempted to have the first associations sanctioning withdrawn. The first and second associations are competing associations doing essentially similar things for the same industry. The aggressive association spent more than $10,000 in time, attorney fees and costs to try and have the first associations sanctioned and failed.

In the first example, the long term effect will be to drive up insurance costs nationwide for every manufacture including the one testifying against the others. The only real effect will be to put everyone out of business, helping no one. As I have said many times before, the insurance industries represented in the outdoor recreation and fitness industries are small pools of money. So small that it is easier not to offer insurance than it is to raise rates as evidenced earlier this decade in the climbing gym and ropes course industries. By promoting, encouraging and participating in lawsuits against competitors you are doing nothing but economically slitting your own throat.

What insurance company is going to offer insurance to a company whose president promotes litigation and increased costs based on his own testimony? Insurance companies do not look at whether or not the business they are insuring is making money, but whether or not they the insurance company is making money. Insurance companies do not like litigation or anyone who promotes litigation, which may cost them money. More importantly, they do not like anyone in their own insurance pool that is taking money out of the insurance pool.

Trade associations are created, according to the internal revenue service, to promote an industry. To help the members achieve their goals. Associations should not have goals outside those of their membership. Consequently, spending $10,000 or more for one association to fight another for the benefit of the association seems to be another big waste of money and probably not part of the purpose of the association.
The word competition does not include the word litigation. Competition is doing the best in your business to promote your business. Every minute you spend trying to put your competitor out of business are two wasted minutes. You wasted a minute that will accomplish nothing, and you lost a minute you could have spent working on your business.

It is about time that everyone looks around in their industry and promotes the industry for their benefit. Sure, that may give rise to more money for a competitor, but more importantly it will help you. Fighting within an industry is just plain stupid when there are enough people outside of the industry willing to do that for you.