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April 22, 2008

New Study Ranks Best, Worst State Lawsuit Climates

WASHINGTON, DC – Senior attorneys at America’s largest employers say state court liability systems have steadily improved over the last several years, but less than half of them rate the state courts as “excellent” or “pretty good.”  These lawyers say Delaware still has the best legal climate in the country, and West Virginia remains the worst. 

Those are among the findings of Lawsuit Climate 2008: Ranking the States, an annual assessment of state liability systems conducted by the nonpartisan market research firm Harris Interactive, and released today by the U.S. Chamber Institute for Legal Reform (ILR).

An analysis of the data over the seven years Harris has conducted the survey indicates an overall improvement in state legal climates.  In a number of states, this trend correlates with legal reforms enacted over the same period.

“We’ve been telling state policymakers for seven years now that they need to improve their state’s lawsuit system in order to attract new business and grow jobs and, at least in some states, the message appears to be getting through,” said Tom Donohue, president and CEO of the U.S. Chamber of Commerce. “But some states are learning that changing the law isn’t enough – they also need to make sure their courts correctly apply the law.”

The study found only two in five (41 percent) of the litigators surveyed rated the reasonableness and balance of the state courts overall as “excellent” or “pretty good,” while more than half (55 percent) called the courts “only fair” or “poor.”

“These lawyers live with the broken lawsuit system day in and day out, and how they perceive the state courts affects where their companies locate and expand their businesses,” Donohue said, noting that nearly two-thirds (63 percent) of the respondents believed the litigation environment in a state could influence important business decisions.

Delaware has held the top spot in the ranking for the entire seven-year run of the ILR/Harris survey.  Other top states include Nebraska, Maine, Indiana and Utah.  West Virginia is ranked in last place for the third year in a row, although its raw score has steadily improved.  Others at the bottom of the list include Louisiana, Alabama, and Illinois.

“The bottom line is this: even though we’re seeing some improvements, from the perspective of global competitiveness, America’s legal climate is only as good as our worst states.  So we need to keep working,” Donohue said.

To highlight the results of the study and the need for comprehensive legal reform, ILR is launching a national television and online advertising campaign, spotlighting the impact of lawsuit abuse on local businesses and families.

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, and Harris computed an overall score for each state based on these evaluations.

On average, survey respondents had nearly 20 years of legal experience, including more than 9 years in their current positions.

The ILR/Harris Interactive survey is the preeminent standard by which companies, policymakers and the media measure the legal environment of states. 

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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