WASHINGTON, D.C.—Arkansas’ lawsuit climate has worsened in recent years and now ranks number 41 out of 50 states according to a new national survey released today by the U.S. Chamber Institute for Legal Reform (ILR). That’s a drop of six places since the survey was last conducted in 2012.
According to the 2015 Lawsuit Climate Survey: Ranking the States, 75 percent of company general counsels and senior attorneys say a state’s lawsuit environment is likely to impact important business decisions at their company, including where to locate or expand. That is an 18 percent increase from eight years ago, and an all-time high.
“More business leaders than ever have identified a state’s lawsuit climate as a significant factor in determining their growth and expansion plans,” said Lisa A. Rickard, president of ILR. “Arkansas’ legislature has enacted some meaningful legal reforms over the last decade, only to see them struck down by the State Supreme Court.”
In 2011, the Arkansas Supreme Court struck down reasonable safeguards that the state legislature enacted in 2003 against runaway punitive or noneconomic damages awards in personal injury cases.
“Amending the state’s constitution would allow Arkansas to continue to attract businesses and build its economy,” said Rickard.
In recent years, Arkansas has enacted some legal reforms, including an attorney general “sunshine” law to promote transparency and limits on contingency fees when the state attorney general hires outside private plaintiffs’ lawyers to conduct state business. It also passed a law to rein in “lawsuit lending” abuses where lenders provide “up-front” cash to individual plaintiffs to cover immediate living or medical expenses during litigation at sky-high interest rates of up to 200 percent.
However, survey participants gave Arkansas’ court system low rankings for its handling of class actions and for having and enforcing meaningful venue requirements aimed to prevent plaintiffs’ lawyers from seeking out favorable court rooms.
In tandem with the 2015 Lawsuit Climate Survey, ILR today released 101 Ways to Improve State Legal Systems, listing key legal reforms that states can adopt to improve their lawsuit climates. ILR also launched a national media campaign to raise awareness about the importance of a fair and balanced lawsuit system.
Harris Poll, a global polling firm, conducted the 2015 Lawsuit Climate Survey through telephone and online interviews between March 9 and June 24, 2015. The respondents were more than 1,200 general counsels and senior attorneys or leaders in companies with annual revenues of at least $100 million.
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.