Pa. legal climate ranks 40th in U.S.

Surveyed lawyers state the ease with which corporations can be sued as the reason behind the state's low grade.

Posted: September 12, 2012

A U.S. Chamber of Commerce survey of hundreds of major corporate lawyers has ranked Pennsylvania as having one of the worst lawsuit climates in the nation while corporation-friendly Delaware was the best.

The chamber's Institute for Legal Reform said Pennsylvania ranked No. 40 among the states when judged on the size of awards, administration of cases, competence of judges and rules permitting lawyers to choose favorable jurisdictions, among other criteria. Among cities, Philadelphia was ranked the fifth worst, with Chicago having the poorest rating.

The basic complaint: It is too easy to bring legal action against companies in Pennsylvania compared to most states.

"Pennsylvania stands geographically between the nation's worst legal climate in West Virginia and its best in Delaware," said Lisa A. Rickard, president of the Washington-based legal reform institute. "Unfortunately, the state is heading more in West Virginia's direction by allowing plaintiffs' lawyers to forum shop for favorable venues like Philadelphia to cash in."

Scott Cooper, president of the Pennsylvania Association for Justice, which represents the state's trial lawyers, sharply criticized the study, saying it offered a biased view of the state's civil justice system. He said that while business critics often point to excessive jury awards in Pennsylvania, the average is boosted by companies suing one another, not by individuals suing companies.

"Garbage in, garbage out," Cooper said of the study. "There are more lawsuit costs from businesses suing businesses than from individuals suing businesses."

The study was made public at a news conference Monday attended by chamber representatives and regional business and health care associations, including the Delaware Valley Healthcare Council (DVHC). The council represents hospitals, long-term care facilities, hospices, and other health care institutions in Philadelphia and surrounding counties.

Hospitals have long complained that the civil justice system in Pennsylvania was tilted against them, boosting insurance rates and discouraging physicians from opening practices here.

"There is a lot of improvement that is needed," said DVHC regional executive Curt Schroder. "There is no doubt that hospitals and doctors still constantly face the threat of litigation."

The survey of 1,100 plus corporate counsel and senior attorneys at companies with revenues of $100 million or more was conducted by Harris Interactive between March and June.

Delaware ranked at or near the top in virtually all of the categories for evaluating its lawsuit climate, including impartiality of judges, discovery rules, and damages.

Seventy percent of respondents said that a state's legal climate would affect business decisions such as where to locate or expand.

At No. 40, Pennsylvania ranked just behind Florida, but ahead of South Carolina. West Virginia offered corporate defendants the worst legal climate, just behind Louisiana and Mississippi, according to the survey.

Business groups regularly criticize Pennsylvania for what they say are lax controls on personal-injury lawsuits that raise business costs and drive out entrepreneurs.

For the last several years, the American Tort Reform Association, an anti-lawsuit group backed by the National Federation of Independent Business, the American Medical Association and other interests, has ranked Philadelphia the nation's number one "judicial hellhole" because of its alleged bias in favor of plaintiffs.

Against that backdrop, court administrators in Philadelphia instituted a series of rule changes aimed at reducing a backlog of asbestos and pharmaceutical cases. The new rules sharply restrict consolidation of cases, long opposed by defense lawyers, and ended the controversial practice of reverse bifurcation, in which juries would decide damages in advance of determining whether the defendant had caused the harm.

The Philadelphia Court of Common Pleas said in June that the pace of filings this year apparently had dramatically declined. The court projected some 1,068 asbestos and pharmaceutical lawsuit filings through the end of the year, a 60 percent decline from 2011.


Contact Chris Mondics at 215-854-5957 or cmondics@phillynews.com.

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