Seven in 10 business leaders say lawsuit climate ‘significant factor’ in determining where to expand, grow
PHILADELPHIA, PA— A new national survey released today by the U.S. Chamber Institute for Legal Reform (ILR) finds that Pennsylvania’s lawsuit climate is among the worst in the country at number 40, while Philadelphia’s courts were mentioned as the fifth worst in the nation for legal fairness.
The significance of a state’s legal climate on business expansion decisions has steadily increased over the last five years. Seven out of ten of the survey respondents say a state’s lawsuit environment is likely to impact important business decisions at their company, such as where to locate or expand their businesses, a thirteen percent increase from survey results just five years ago.
“As our economic downturn has continued, a growing percentage of business leaders have identified a state’s lawsuit climate as a significant factor in determining their growth and expansion plans, and the jobs that come along with them,” said Lisa A. Rickard, president of the U.S. Chamber Institute for Legal Reform. “That makes the consequences of this survey even more significant to the economic growth of Pennsylvania.”
ILR released the Lawsuit Climate 2012 study in Philadelphia because Pennsylvania has fallen six spots to number 40 in the survey, ranking it among the nation’s worst legal climates. This drop can be largely attributed to problematic practices in Philadelphia’s Court of Common Pleas, including a surge of out-of-state plaintiffs into the court. In 2011, out-of-state plaintiffs accounted for nearly half of all asbestos lawsuits and more than eighty percent of pharmaceutical lawsuits filed in the Philadelphia court.
“Pennsylvania stands geographically between the nation’s worst legal climate in West Virginia and its best in Delaware. Unfortunately, the state is heading more in West Virginia’s direction by allowing plaintiffs’ lawyers to ‘forum shop’ for favorable venues like Philadelphia to cash in,” said Rickard.
Additionally, Pennsylvania’s lawsuit climate ranked beneath every neighboring state except West Virginia, which ranked last. The study ranked Delaware (1), Maryland (33), New Jersey (32), New York (18), and Ohio (30) all ahead of Pennsylvania.
According to the 2011 study, Creating Conditions for Economic Growth: The Role of the Legal Environment, conducted by the NERA Economic Consulting for ILR, Pennsylvania could save up to $1.7 billion in tort costs and increase employment by as much as 0.57 – 1.53% if it were to improve its lawsuit environment.
ILR was joined at the survey release by leaders of the Pennsylvania Chamber of Business and Industry, the Greater Philadelphia Chamber of Commerce, the Pennsylvania Manufacturers Association, the Pennsylvania Medical Society, the Pennsylvania Hospital and Health System Association, the National Federation of Independent Business, the Pennsylvania Business Council and the Pennsylvania Health Care Association.
Harris Interactive conducted the survey Lawsuit Climate 2012: Ranking the Statesby telephone and online between March and June 2012. The respondents—general counsels and senior attorneys or leaders in companies with annual revenues of at least $100 million—were asked to rank states for their overall treatment of tort, contract, and class action litigation. Among other elements, respondents also ranked states for the impartiality and competence of their judges and the fairness of their juries.
See the entire fifty-state list and read a full copy of Lawsuit Climate 2012: Ranking the States online at: www.instituteforlegalreform.com/states
For all media information, video clips and press releases on the Lawsuit Climate 2012: Ranking the States survey, go to: www.instituteforlegalreform.com/media
ILR 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 the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.