The US Congress has passed a small but significant new bill into law. The Lawsuit Abuse Reduction Bill imposes sanctions against parties which file frivolous lawsuits.

The new law amends Rule 11 of the Federal Rules of Civil Procedure to penalise lawyers, law firms or parties who engage in frivolous lawsuits. It also limits “forum shopping” by lawyers seeking a more compliant judge. From now on lawsuits can only be filed in the jurisdiction in which the plaintiff lives.

National Association of Mutual Insurance Companies Senior VP David Winston applauded the new law. “Frivolous claims and ‘litigation tourism’ stifle economic growth,” he said. “Today the average family of four pays a $US3380 [$4558] ‘tort tax’. No other industrialised country pays more as a percentage of its GDP.”