I learned an interesting fact in school tonight. According to my textbook and this article Wal-Mart was sued 4,851 times in 2000. That means that an average of once every 2 hours every day of the year. They have been sued for some strange things such as people being abducted from the Wal-Mart parking lot, people slipping on French fries and falling, people having merchandise fall on their head, etc.
The book also states that Wal-Mart doesn’t give in to lawsuits, even if it costs less to settle than to fight the lawsuit. They are likely trying to set a precedent to scare of people who think they can cash in with a lawsuit. Most companies use risk management to determine whether it costs less to settle or to litigate, and settling is usually the chosen path regardless of a lawsuit’s merit. Recently a large Canadian bank settled an Enron lawsuit for $2.1 billion dollars. They had made a decision that it would be a better business decision to settle and not admit fault, rather than fighting it and risking having a jury settle against it, which is also a risk to a company’s reputation.
According to the article I linked to above, the only entity that gets sued more than Wal-Mart is the U.S. Government, which according to the article, estimates indicate that it was sued more than 7,500 times in 2000.