Helping You Do Business Right

Protecting your business from a CUTPA claim

On Behalf of | Dec 7, 2020 | business law, litigation

In general, Connecticut is a great state for a business. The workforce is generally well educated and reliable and there are numerous growth opportunities. In fact, US News has ranked us as a top ten state for businesses.

However, the Connecticut Unfair Trade Practices Act (CUTPA) can cause some significant challenges for local businesses.

What is CUTPA?

In general, CUTPA is a state law that incorporates and expands the Federal Trade Commission regulations of unfair trade practices.

CUTPA expansion over the years

Over the years since it was first written into law, CUTPA has been greatly expanded in scope so that “any person or business entity, not just consumers, who claimed to suffer ‘any ascertainable loss of money or property…as a result of…’an unfair trade practice could sue.” Later, CUTPA was expanded even further so that any consumer could bring a claim, even without establishing that any public wrong had been committed.

Further, CUTPA incentivizes potential plaintiffs with the possibility of obtaining punitive damages and attorney fees on top of any actual damage awards they might receive if their claims are victorious.

In short, the Connecticut legislature has left its businesses unprotected in the line of fire when it comes to unfair and deceptive practices claims.

The last protection for businesses vanishes

The only thing keeping CUTPA from becoming a free pass to sue a local business for unfair business practices was the “commercial relationship” requirement. But even that seems to be gone now.

In the case of Soto v. Bushmaster Firearms International, LLC, the Connecticut Supreme Court ruled that there no longer needs to be a direct commercial relationship between the plaintiff and the defendant business. As long as some measurable harm has occurred to the plaintiff, no direct commercial relationship is required to bring a claim.

What can you do to protect your business?

The good news is that, while CUTPA claims may be on the rise, most claims are unsuccessful unless they are particularly strong or involve particularly egregious violations of existing unfair trade practice law.

The most important thing you can do is align your business with a business attorney you trust. You need a legal team that has the knowledge and experience to be agile in this uncertain legal landscape and can resolve these claims efficiently, out of court whenever possible. Protect your business’s future by taking steps now.