California Stuck Near Bottom in Ranking of Legal Climate.

U.S. Chamber: Legislature Must Pass 'Meaningful Reforms'

WASHINGTON -- The U.S. Chamber Institute for Legal Reform (ILR) today announced that California moved down one spot to number 45 in Lawsuit Climate 2007: Rating the States, an annual assessment of state liability systems conducted by Harris Interactive, a leading nonpartisan polling firm. In addition, Los Angeles was again named the least fair and reasonable litigation environment in the country.

"California's low ranking is not surprising, given the fact that California courts are willing to certify class action lawsuits most other jurisdictions would toss out, and that California juries are increasingly likely to award disproportionately large judgments in civil cases," said Tom Donohue, president and CEO of the U.S. Chamber of Commerce.

California is becoming a target for "litigation tourism," according to the Chamber, as plaintiffs' lawyers file hundreds of lawsuits on behalf of non-residents, after similar lawsuits were shut down by changing laws in Mississippi and Texas. California has, however, made progress in improving its business and jobs climate, Donohue noted. In particular, Governor Schwarzenegger has shown leadership in reforming the state's workers compensation system, and the efforts of CalChamber and the Civil Justice Association of California in passing Proposition 64, which restricted the ability of the plaintiffs' bar to file "clientless lawsuits."

"Without a fair and reasonable legal system, progress can easily be thrown off track," said Donohue. "An unfair legal system sucks the life out of a state's economy. It affects business expansion, it affects jobs and it takes money out of consumers' pockets. The legislature must pass meaningful legal reform before California's lawsuit climate will show significant improvement."

A recent actuarial study estimated the annual cost of the tort system in America to be $261 billion, or $880 per citizen. Following those estimates, the price tag of the lawsuit system for the entire population of California is almost $32 billion.

The ILR/Harris Interactive survey of 1,599 senior attorneys, now in its sixth year, is the preeminent standard by which companies, policymakers and the media measure the legal environment of states. ILR is launching a national advertising campaign highlighting the results of the study and the need for comprehensive legal reform, including newspaper ads and billboards in Los Angeles, Sacramento, San Diego and San Francisco.

ILR's mission is to make America's legal system simpler, fairer, and faster for everyone. It 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 more than 3 million businesses and organizations of every size, sector, and region.

The Harris Interactive/ILR ranking survey is available online at www.instituteforlegalreform.com.