W.Va Worst, Delaware Best For Litigation, U.S. Chamber Says

The U.S. Chamber of Commerce announced today that it found West Virginia, Louisiana, Illinois, California and Texas were among the worst states for legal fairness, while Mississippi is improving after enacting legal reforms.

Reacting to the chamber's announcement, an insurance trade group said that Mississippi might not be doing that well because of lawsuits filed by the state's attorney general and others against property insurers over their denial of Hurricane Katrina water damage claims.

There is a "threat to the state from unrestrained litigation in the wake of Hurricane Katrina," according to the American Insurance Association.

The Chamber moved Mississippi up to 48th place from dead last in its rankings.

Tom Donohue, president and chief executive officer of the U.S. Chamber, said the group's survey sends a message to states whose legal climate drives away businesses, jobs and economic development. That message, he said, is: "If you want a healthy state economy, clean up your act."

The study found the five top states for overall legal fairness are, in order, Delaware, Nebraska, Virginia, Iowa and Connecticut.

Judged as the eight worst states--from worst up--were West Virginia, Louisiana, Mississippi, Alabama, Hawaii, Illinois, California and Texas.

The "2006 State Liability Systems Ranking Study" was conducted by Harris Interactive for the Chamber's Institute for Legal Reform. The survey, now in its fifth year, polled more than 1,400 senior attorneys to explore how reasonable and fair the tort liability system is perceived to be by U.S. businesses.

Attorneys were asked to judge a number of factors, including overall treatment of tort and contract litigation, treatment of class-action suits and mass consolidation suits, judges' impartiality and competence, and juries' predictability and fairness.

The Chamber said that its ILR is launching a national advertising campaign highlighting the results of the study and the need for comprehensive legal reform.

Concerning Mississippi, Cecil Pearce, AIA's vice president for the Southeast Region, said "it would be a tremendous setback to the state and the businesses that want to contribute to Mississippi's rebuilding effort if we were to now lose the civil justice reform war due to excessive and frivolous post-Katrina litigation."

AIA criticized "opportunistic lawsuits by trial lawyers seeking to take advantage of both plaintiffs and defendants."

The group said that Mississippi Attorney General Jim Hood's lawsuit against insurers--seeking to invalidate the long-standing water damage exclusion in homeowners insurance policies--could have long-term negative ramifications on both the insurance system and the state's economy, if it is successful.

Mr. Hood has argued that any water damage claims should be paid under wind damage coverage because it was a storm surge driven by hurricane gusts rather than normally excluded flooding that caused the losses.