California Lawsuit Climate Ranks Among Nation’s Worst

WASHINGTON--(BUSINESS WIRE)--A new national survey released today by the U.S. Chamber Institute for Legal Reform (ILR) finds that California’s lawsuit climate is among the worst in the country, coming in at number 47 out of 50. Among local jurisdictions, Los Angeles’ courts were mentioned as the second worst in the nation for legal fairness while the state as a whole was named the third worst. San Francisco’s courts were stated to be the fourth worst.

“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”

The significance of a state’s legal climate on business expansion decisions has steadily increased over the last five years. Seven out of ten 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 13 percent increase from the 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 California.”

California’s lawsuit climate ranked beneath neighboring states Arizona and Oregon, who ranked in the 17^th and 28^th spots, respectively.

“Plaintiffs’ lawyers bring cases in California because the state’s courts rubber-stamp class actions and juries award outsized paydays,” said Rickard.

According to the study Creating Conditions for Economic Growth: The Role of the Legal Environment, completed for ILR by NERA Economic Consulting in 2011, California could save up to $5.3 billion in tort costs and create between 104,000 and 283,000 new jobs by improving its legal environment.

Harris Interactive conducted the survey Lawsuit Climate 2012: Ranking the States by 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 50-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.