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April 22, 2008

Louisiana Ranked as Second Worst Legal Climate in Nation

WASHINGTON, DC – Louisiana’s legal climate is ranked as the second worst in the country, according to Lawsuit Climate 2008: Ranking the States, the annual assessment of state liability systems conducted by Harris Interactive, a leading national market research firm, and released today by the U.S. Chamber Institute for Legal Reform (ILR). 

Louisiana ranked 49th out of 50 states in the study, down one spot from the previous year.  In addition, New Orleans/Orleans Parish was named among the ten least fair and reasonable court systems in the country.

“Louisianans have a unique opportunity to turn things around.  While the state is off to a good start in improving its business climate, even more can be done,” said Tom Donohue, president and CEO of the U.S. Chamber of Commerce. 

He noted that Governor Jindal and the Louisiana Legislature have already taken steps to address the state’s business climate, adopting tough new ethics standards to root out corruption, and repealing outdated taxes which stymied business development.

But the state also needs to “take a comprehensive look at fixing the broken lawsuit system,” Donohue said, pointing out that Louisiana has languished near the bottom of the legal climate rankings since ILR and Harris began conducting the state liability system study seven years ago. 

According to Donohue, Louisianans need look no further than their neighbors to the east in Mississippi, and their neighbors to the west in Texas.  Both states have enacted comprehensive tort reforms, and both states are reaping economic benefits because of it, he said. 

The study is the preeminent standard by which companies, policymakers and the media measure the legal climate of states. 

A separate survey of Louisiana business owners found 89 percent believe frivolous lawsuits are a serious problem, 58 percent think the number of unfair lawsuits against businesses in Louisiana will increase over the next five years, and 69 percent want the Louisiana Legislature to enact new laws to help protect business from unfair and frivolous suits.

“The best thing Louisiana can do to attract business is to have a balanced legal system,” Donohue said.  “An unfair legal system sucks the life out of a state’s economy.  It slows business expansion, it kills jobs and it takes money out of consumers’ pockets.”

Donohue noted that the Louisiana Legislature is considering several reform measures, including junk science and asbestos litigation reforms.

ILR is launching a national advertising campaign highlighting the results of the study and the need for comprehensive legal reform, including television, radio, print and online ads in Louisiana.

Harris asked 957 senior attorneys to evaluate up to five states in which they were “very” or “somewhat familiar” with that state’s litigation environment.  Survey respondents assigned each state a letter grade for each of 12 different factors affecting the states’ tort liability system, ranging from the overall treatment of tort and contract litigation to judges’ competence and impartiality.  Harris computed an overall score for each state based on these evaluations, then compiled the scores into a ranking of the states.

The survey of 255 Louisiana business owners, 86 percent of them small businesses with fewer than 20 employees, was conducted by Public Opinion Strategies earlier this month.  It has a margin of error of +/- 7 percent.

ILR’s mission is to make America’s legal system simpler, fairer, and faster for everyone. It seeks to promote civil justice reform through legislative, political, judicial, and educational activities at the national, state, and local levels. The U.S. Chamber of Commerce is the world’s largest business federation, representing more than 3 million businesses and organizations of every size, sector, and region.

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