Texas legal climate ranked 36th in new survey

By Marilyn Tennissen | Sep 10, 2012

In a new national survey, Texas finds itself once again with an unfavorable ranking of its legal climate.

According to Lawsuit Climate 2012: Ranking the States released on Monday by the U.S. Chamber Institute for Legal Reform, Texas (in general) was ranked No. 7 as a region with the least fair and reasonable litigation environment for both defendants and plaintiffs. Overall, the Lone Star State’s legal climate was ranked 36th among the states.

“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 ILR, which owns the Southeast Texas Record. “That makes the consequences of this survey even more significant to the economic growth of the states.”

The survey of general counsels and senior attorneys in companies with annual revenues of at least $100 million was conducted between March and June 2012. Respondents were asked to rank states for their overall treatment of tort, contract and class action litigation. The rankings also included impartiality and competence of judges and the fairness of juries, among other elements.

In addition to the overall rankings, specific jurisdictions or cities in Texas were among the Top 25 deemed least fair. East Texas, Houston, Beaumont and Dallas-Fort Worth each made that list.

For many years, Texas, and Southeast Texas in particular, has had a negative reputation as being extremely hospitable to plaintiffs. However since the state enacted a series of tort reform measures in 2003 and 2005, the legal climate appears to be improving.

Over the last 10 years of the Lawsuit Climate survey, Texas has risen from No. 46 in 2002 to No. 36 in 2011 and 2012.

The report explores how reasonable and balanced the states’ tort liability systems are perceived to be by U.S. businesses. Tom Donahue, president of the U.S. Chamber of Commerce, said the legal climate is more important than ever.

“There is an ever expanding reaction from the business community that before i take my money and my employees and my factories and my businesses to your state, or before I expand in the states I'm currently invested in, I'm going to look at what the legal environment in the state is,” Donahue said in a video posted on the Chamber website.

“Seventy percent of the people we surveyed say that before we spend a dime, we look carefully at the legal environment. That means that if we are going to find ourselves in court all the time, if we are going to find ourselves dealing with legal systems that encourage suits and that finance suits and that otherwise make it difficult for companies to avoid legal expenditures beyond what's reasonable, they're not going to go there. It's pretty simple.”

Surveys and rankings about the legal climate in Texas are generally disputed by the trial bar. The Southeast Texas Record has contacted the Texas Trial Lawyers Association and is expecting a reaction from the group.

To read the full report, visit http://www.instituteforlegalreform.com/states.


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