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Editorial: Lawsuit climate costing state money, jobs

Last Modified: Monday, October 01, 2012 7:15 PM

A survey ranks the lawsuit climate in Louisiana as the second worst in the nation.

The U.S. Chamber Institute for Legal Reform, which conducted the survey, says that doesn’t bode well for business expansion. According to the ILR, seven out of 10 survey respondents said a state’s lawsuit environment is likely to impact key business decisions at their company. That’s up 13 percent from survey results five years ago, according to the ILR.

“Despite recent positive developments, Louisiana is still notorious for excessive verdicts, loose class-certification standards and an unfair judiciary,” said Lisa Rickard, president of the U.S. Chamber Institute for Legal Reform.

The survey, conducted earlier this year, asked general counsels, senior attorneys and leaders in companies with annual revenues of at least $100 million to rank states for their overall treatment of tort, contract and class action litigation. They were also asked to rank states for the impartiality and competence of judges and fairness of juries.

None of this is new to Louisiana. This was the third consecutive year that Louisiana was ranked 49th in the country for lawsuit climate. The state has never ranked higher than 47th since the beginning of the survey in 2002.

West Virginia was ranked 50th. Illinois was ranked 46th, followed by California and Mississippi.

Conversely, Delaware was ranked first in the country for lawsuit climate, followed by Nebraska, Wyoming, Minnesota and Kansas.

Louisiana ranked dead last in timeliness of summary judgments or dismissals and 49th in overall treatment of torts and contract litigations, treatment of class action suits and mass consolidation suits and scientific and technical evidence. It was ranked 48th in damages, judges’ impartiality, judges’ competence and judges’ fairness, 47th in having and enforcing meaningful venue requirements and 46th in discovery.

According to a study for the ILR by NERA Economic Consulting, the state’s lawsuit climate is costing Louisiana money and jobs. The study found that in 2011, an improved legal environment would have saved businesses operating in the state up to $1.1 billion in tort costs and would have increased employment between 1.03 percent and 2.79 percent.

Louisiana’s consistently low ranking is indicating there’s a wider problem that needs to be fixed. In the face of budget cuts and slow growth, Louisiana cannot afford to lose jobs and revenue because of an anti-business legal climate.

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This editorial was written by a member of the American Press Editorial Board. Its content reflects the collaborative opinion of the Board, whose members include Bobby Dower, Ken Stickney, Jim Beam, Crystal Stevenson and Donna Price.

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