Tort Systems Study Provides Officials with Guidelines

In the competition for jobs and capital investment among the states, those states that suffer from high tort costs and litigiousness will continue to lose jobs and businesses to states with superior tort systems.

In case you missed it — the 2008 State Rankings: Sinners and Saints Among Tort Systems put together by the think tank Pacific Research Institute (PRI) was released earlier this month and is well-worth the read.

Some highlights are that Florida ranks the worst in terms of tort costs and litigation risks, while North Dakota ranks the best. In a separate ranking, Colorado has the best tort laws on its books, while Rhode Island has the worst.

Those are some of the quick snapshots the report provides in its comparison of the legal climates of all 50 states, the U.S. Tort Liability Index: 2008 Report.

The study has real life use and applicability. Co-author of the study and director of Business and Economic studies Dr. Lawrence J. McQuillan at PRI said that in the competition for jobs and capital investment among the states, those states that suffer from high tort costs and litigiousness will continue to lose jobs and businesses to states with superior tort systems. PRI developed the Index as a tool for governors and state legislators to assess their tort systems and to enact laws that will improve the business climate of their states.

This study will be looked at by state officials that actually make decisions and that is key.

The study divided the states into four groups: saints, sinners, suckers, and salvageables. Midwestern states appear in all categories.

Saints: States that have relatively low tort costs and/or few litigation risks and relatively strong tort rules on the books. These states are well positioned to contain their tort liability costs in the future if the rules are implemented as written. These states include Alaska, Mississippi, Ohio, Tennessee and Utah.

Sinners: States that have relatively high tort costs and/or high litigation risks and relatively weak tort rules on the books. The sinners are likely to face high and rising tort liability costs in the future if lawsuit abuse continues unchecked. These states include Alabama, Arizona, Arkansas, California, Illinois, Maryland, Massachusetts, New York, Oregon, Pennsylvania, Rhode Island, Washington, West Virginia and Wisconsin.

Suckers: States that have weak tort rules on the books because they currently have relatively low tort costs and/or few litigation risks and, therefore, foolishly believe that they are not vulnerable and reform is not needed. These states include Hawaii, Iowa, New Mexico, North Carolina, North Dakota and Virginia.

Salvageables: States that have moderate to high relative tort costs and/or moderate to high litigation risks, yet have moderate to strong tort rules, probably as a result of recent reforms. These states include Colorado, Florida, Georgia, Indiana, Louisiana, Michigan, Missouri, Nevada, New Jersey, South Carolina and Texas.

What does all of this mean? Co-author Hovannes Abramyan, a PRI public policy fellow, summed it saying, “We hope that our rankings will encourage state officials and residents to enact tort reforms or to enforce and defend strongly those they have on the books.”