Study reveals Louisiana is perceived as second worst legal environment in country

Kyle Barnett Sep. 10, 2012, 11:27am

Leigh Ann Schell and Melissa Landry

NEW ORLEANS – An annual survey ranking states based on the perception of their legal climates was released today finding Louisiana has the second worst perception in the country.

The Creating Conditions for Economic Growth Study found that by improving the state's legal environment Louisiana may be able save $1.1 billion in tort costs per year and increase employment rates by approximately three percent. The study was funded the U.S. Chamber of Commerce Institute for Legal Reform.

An integral part of the study was the "Lawsuit Climate 2012" survey, which ranked states by polling general counsels and senior attorneys in companies with annual revenues in excess of $100 million. Those polled were asked to rank states on their overall perception of how tort, contract and class action litigation were treated. Other elements that were taken into account were impartiality and competence of judges. The results found 70 percent of those polled said lawsuit climate is a determining factor in where business leaders plan to grow their businesses.

Since the study's inception in 2002, Louisiana has never risen above number 47 on the list. This year marks the third time in a row the state is ranked 49th in lawsuit climate perception.

Melissa Landry with Louisiana Lawsuit Abuse Watch said the results of the study were unsurprising.

"While we did make some progress earlier this year in passing legislation that will help to stop meritless lawsuits in the niche sector of legacy litigation, that was just the tip of the iceberg," she said. "We still have a lot more work to do to bring fairness and balance back to Louisiana's civil justice system, and these rankings reflect that."

Leigh Ann Schell, a founding partner with New Orleans defense firm Kuchler, Polk, Schell, Weiner & Richeson, said she would like to see procedural rules change in the state.

"Not only do we have excessive verdicts in the state, we're also often forced into difficult positions in getting cases ready for trial on very short notice and difficult deadlines to comply with," she said.

"That's a tough position as far as getting ready to defend the cases for trial. We're not met with a very sympathetic judiciary so the procedural problems also are difficult."

Schell also points to large punitive damages as part of the problem with the state's legal perception.

"There was a $17.5 million verdict out of Lake Charles in Calcasieu Parish earlier in the year in a benzene case where the jury awarded $12 million in punitive damages," Schell said. "The elimination of punitive damages in full would be helpful."

Landry said she hopes lawmakers will take the findings of the study into account as they head into the 2013 legislative session.

"Clearly, Louisiana's civil justice climate has a bad reputation, and whether we like it or not, reputations matter," Landry said.

"Companies look to invest and create jobs where the legal system is fair, so why would they choose to come to a state that's nationally known for frivolous lawsuits, biased courts and outrageous jury awards?

"They won't. That's why we need to clean up our act."

Numerous members of trial lawyer's association Louisiana Association for Justice were contacted by email and asked to contribute to this report, however, none responded to our request.

The Louisiana Record is owned by the Institute for Legal Reform.

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