With the Occupy Wall Street protests still smoldering and the national debate over wealth and income disparity in full gear, many high- net-worth families feel that public perceptions of them have grown more negative since the 2008 economic crisis. Amid calls for imposing the “Buffett Rule” and other measures to increase taxes on the rich, they are also concerned about a less publicized but potentially serious threat to their financial well-being: a costly liability lawsuit.
Indeed, a new survey commissioned by ACE shows that many wealthy families, defined as households with $5 million or more in investable assets, increasingly fear such lawsuits. Almost 40% believe they are more likely to be sued in the aftermath of the economic crisis, compared to only 7% who say they are less likely to be sued. More than 80% agree their wealth alone makes them an attractive target for liability lawsuits.
Their fears are well founded. Under the widespread doctrine of joint and several liability, if more than one defendant is responsible for a plaintiff’s injury, any one of them may be held liable for the full amount of the damage award. Therefore, a lawyer will often target the person with the highest net worth, not the one most at fault.