This would dissuade individuals from signing up to frivolous lawsuits in the knowledge that they risk nothing, however much damage they may inflict on a company, its workers and its shareholders.
Selling a big chunk of your wares through Wal-Mart's enormous distribution system can be a boon if the company likes what you have, but it also has the market power to inflict a lot of damage by shifting your shelf space or dropping you altogether.