Delaware Regains Nation's Top Lawsuit Climate Rank

Reclaims Top Spot After Fall in 2017


September 18, 2019

WASHINGTON, D.C.—Delaware’s lawsuit climate was ranked No. 1 in a new national survey released today by the U.S. Chamber Institute for Legal Reform (ILR). “The First State” has been first in almost every survey since 2002, except in 2017 when it fell to 11th place.

The 2019 Lawsuit Climate Survey: Ranking the States, conducted by renowned polling firm The Harris Poll on behalf of the U.S. Chamber Institute for Legal Reform, questioned senior business executives about the fairness and reasonableness of state court systems.

Delaware’s legal climate fell to 11th place in 2017 after its legislature banned “loser pays” provisions in company bylaws requiring shareholders who file and lose lawsuits to reimburse companies’ legal fees.

But Delaware’s well-respected Chancery Court has been very effective in reining in frivolous lawsuits in the state’s courts. A 2016 ruling by the Court prohibited so-called disclosure only settlements in merger and acquisition lawsuits, in which all of the money went to lawyers and not plaintiffs. As a result of the Chancery Court’s decision, these types of lawsuits have largely migrated out of Delaware to other jurisdictions, such as the federal courts.
“Hands down, Delaware has some of the most competent and experienced judges and most stable legal system in the country,” said Harold Kim, chief operating officer of the U.S. Chamber Institute for Legal Reform. “As long as the state legislature doesn’t try to interfere with that, Delaware will continue to be a great state in which to do business.”

The excellent perception of Delaware’s legal climate is helpful to its economy. According to the survey, 89 percent—an all-time high—said a state’s lawsuit environment is likely to impact their company’s decisions about where to locate or do business.

The 2019 Lawsuit Climate Survey: Ranking the States is the 12th time The Harris Poll has conducted the survey since 2002 for the U.S. Chamber Institute for Legal Reform. The final results are based on interviews with a national sample of 1,307 in-house general counsel, senior litigators or attorneys, and other senior executives who are knowledgeable about litigation matters at public and private companies with annual revenue of at least $100 million.


About the U.S. Chamber Institute for Legal Reform

ILR seeks to promote legal reform through legislative, political, judicial, and educational activities at the national, state, and local levels.

About the U.S. Chamber of Commerce

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.

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