California, Illinois & West Virginia Rank among Worst States in Lawsuit Climate Survey; Delaware Ranked Best

Lawyers for U.S. companies say California, Illinois and West Virginia have some of the worst legal climates in the country for businesses, according to a new survey released yesterday by the U.S. Chamber Institute for Legal Reform (ILR).

Delaware, according to those surveyed, has the best legal climate for businesses.

Seventy percent of the more than eleven hundred company general counsels and senior attorneys who participated in the survey said a state’s lawsuit environment is likely to impact important business decisions at their company, including where to locate or expand their businesses.

This number is up thirteen percent from the same survey conducted five years ago, before the recession.

“As our economic recovery has stalled, 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 individual states.”

ILR released the Lawsuit Climate 2012 study in Philadelphia alongside business groups from across the Commonwealth.  Pennsylvania’s legal environment has worsened in recent years, according to survey participants, in large part because of lax venue rules, especially in the Philadelphia Court of Common Pleas, where forty-seven percent of the asbestos cases filed last year were by out-of state plaintiffs. 

Pennsylvania was ranked among the states with the least fair and reasonable legal environments and Philadelphia was ranked as the fifth worst city or county legal environment in the country following Cook County, Illinois and Los Angeles.

“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.

To highlight this issue, ILR has launched a new national television and online advertising campaign featuring Blitz USA, a Miami, Oklahoma-based company driven out of business in July as the result of unwarranted lawsuits against it. See the commercial at: www.instituteforlegalreform.com/media.

Harris Interactive conducted the survey Lawsuit Climate 2012: Ranking the States through telephone and online interviews 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.

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