Vermont Business Magazine The perception of the threat of litigation toward business in Vermont has dropped precipitously in the last seven years, as the state has gone from 25th to second. The 2017 Lawsuit Climate Survey: Ranking the States was released today and conducted for the US Chamber Institute for Legal Reform by Harris Poll to explore how fair and reasonable the states’ liability systems are perceived to be by US businesses. These perceptions matter, the report states, because they can be influential in business decisions about where to conduct/expand/constrict business operations or sales. Vermont was also second in the previous report, released in 2015, after being 25th in 2010. Long-time corporate state champion Delaware, home to numerous domiciles, has fallen to 11th.
Most of the respondents in this survey (85%) report that a state’s litigation environment is likely to impact important business decisions at their companies, such as where to locate or to do business. This is a significant increase from 75% in 2015 and 70% in 2012.
The 2017 survey also reveals that the overall average scores of the states are increasing, and senior attorneys and executives see the litigation environment improving generally; more than six in ten respondents (63%) view the fairness and reasonableness of state court liability systems in the United States as excellent or pretty good, up from 50% in 2015 and 49% in 2012. The remaining 36% view the system as only fair or poor, or declined to answer (1%).
Participants in the survey were comprised of a national sample of 1,321 in-house general counsel, senior litigators or attorneys, and other senior executives at companies with at least $100 million in annual revenues who indicated they are: (1) knowledgeable about litigation matters at companies; and (2) have first-hand, recent litigation experience in each state they evaluate. The 2017 ranking builds on previous years’ work where in ten prior surveys (beginning in 2002) all 50 states were ranked by those familiar with the litigation environment in that state.
Respondents were first screened for their familiarity with states, and those who were very or somewhat familiar with the litigation environment in a given state, were then asked to evaluate that state. It is important to remember that courts and localities within a state may vary a great deal in fairness and reasonableness. However, respondents had to evaluate the state as a whole. To explore the detailed nuances within each state was beyond the scope and purpose of this study. Other studies have demonstrated variability within a state.
For example, several studies have documented very high litigation activity in certain county courts such as Madison County, Illinois, and Jefferson County, Texas, revealing that these counties have “magnet courts” that are extremely hospitable to plaintiffs. Thus, it is possible that some states received low grades due to the performance of one or two of their counties or jurisdictions. Of course, state evaluations could also have been raised by city or county court systems that perform very well.
The survey broadly focuses on perceptions of the state liability system by asking respondents to grade the following areas:
- Overall treatment of tort and contract litigation
- Enforcing meaningful venue requirements
- Treatment of class action suits and mass consolidation suits
- Proportional discovery
- Scientific and technical evidence
- Trial judges’ impartiality
- Trial judges’ competence
- Juries’ fairness
- The quality of appellate review
Respondents assigned grades of A, B, C, D, or F to each of these elements. The rankings were developed from these grades.
Source: US Chamber 9.12.2017. www.instituteforlegalreform.com/uploads/pdfs/Harris-2017-Executive-Summary-FINAL.pdf