Lawsuit Reform — An Economy Booster for Mich., N.Y., N.J.

By June 15, 2010Briefly Legal

Lawrence McQuillan of the Pacific Research Institute has been following up PRI’s latest “U.S. Tort Liability Index” report with state-specific commentaries about the value of tort reform in improving state business climates. The states he has picked so far — Michigan, New Jersey, New York, Connecticut — could sure use the help.

Detroit Free Press, “Lawsuit reform could boost state economy“:

Michigan fell 15 places from 28th in the previous 2008 edition, so it is heading in the wrong direction. Michigan has the fourth-highest monetary tort losses out of the 50 states. It also ranks 30th in tort litigation risks.

It has the ninth-largest number of lawyers per dollar of state output. Despite the drop in Michigan’s level of economic activity in recent years, the state’s tort costs and number of lawyers filing tort lawsuits stay remarkably high, signaling that Michigan’s courtrooms are still ripe for lawsuit abuse compared to other states, especially in the categories of product liability and auto liability.

New York Post, “‘Tort Threat’ is a Tri-State Jobs Killer“:

New York’s tort laws are among the worst in the nation when it comes to limits on who can sue, how much they can sue for and similar rules that can contain tort costs and risks. (Among 29 such limits tracked in the Tort Liability Index, the Empire State ranks dead last in 19.) Connecticut is nearly as bad, joining New York in the Index’s “sinner” category. New Jersey, with more serious limits, makes it into the “salvageable” category.

It’s important to realize that everyone pays for the “tort threat.” Making businesses easy targets for personal-injury lawyers is a serious jobs-killer.

When deciding where to start a business, expand operations or relocate, entrepreneurs prefer states with tort systems that discourage abusive lawsuits. In 2006, job growth was 57 percent greater in the 10 states with the best “tort climates” than in the 10 worst states.

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