UPDATE: 1:28 p.m.
Lawyers and corporate executives say West Virginia is the state with the worst lawsuit climate for businesses, according to a new report from the U.S. Chamber Institute for Legal Reform.
The institute surveyed a collection of 1,482 in-house general counsel, litigators, other lawyers and executives about which states had the most fair tort liability systems. It found that Delaware was considered the friendliest jurisdiction, followed in order by North Dakota, Nebraska, Indiana and Iowa.
West Virginia was accompanied at the bottom of the list by Louisiana, Mississippi, Alabama and California. While Illinois barely missed the bottom five, coming in at number 45 out of 50, it did earn its own dubious honor: Cook County, home to the city of Chicago, was voted the city or county with the least reasonable litigation environment, earning nods from 14% of survey participants. It was trailed by Los Angeles, Calif., which was mentioned by 12% of respondents.
It’s a familiar position for both West Virginia and Cook County, which were ranked numbers two and three, respectively, on the American Tort Reform Foundation’s last list of “Judicial Hellholes.”
While the District of Columbia was not included in the survey, Virginia fared relatively well, placing taking sixth. Maryland fell near the middle of the pack, at number 20.
This is the institute’s eighth survey of state torts systems since 2002. According to its Web site, the organization was founded in 1998 by the U.S. Chamber of Congress to “address the country's litigation explosion.”
The current survey found that a state’s litigation environment is becoming increasingly important to companies when deciding where to do business. This year, 67% of respondents said the issue was likely to impact key business decisions at their company such as where to locate, up from 63% in 2008.
The states near the bottom of the institute’s survey are “getting worse,” U.S. Chamber of Commerce President Thomas Donohue said in a videotaped statement.
“The bottom line is simple,” Donohue said. “If you have two thirds of the companies, who are being advised by their in house lawyers, who have made it very, very clear to us that they consider this issue fundamental in deciding where to make their investments, those states have a real problem.”
Perceptions of state tort systems on the whole were mixed, with 42% of those surveyed calling them “pretty good.” Another 47% ranked them “only fair.” Just 2% called them “excellent,” while 9% deemed them “poor.”
Survey participants said “tort reform issues in general” and caps on awards were the most important issues for state policy makers to consider. Each were noted by 9% of respondents. Timelines for decisions were cited by another 8%, while 7% mentioned both eliminating unnecessary lawsuits and putting limits on discovery.
The American Association for Justice, a trial lawyers group, released a statement today criticizing the survey for lacking a sound methodology and relying on the opinions of the corporate defense bar.
“The Chamber’s report is just another shallow attempt to weaken the civil justice system to help its Wall Street and big business financers,” spokesman Ray De Lorenzi said in the statement. “The American people have seen what happens when the Chamber’s largest clients – like AIG, insurance and drug companies – are not held accountable. This is just one more call from the corporate lobby to bail out negligent corporations while everyday Americans are left holding the bag.”