Pa. lawsuit climate among worst in the nation, says new ILR survey

By Jon Campisi | Sep 10, 2012

The Commonwealth of Pennsylvania’s litigation climate is among the worst in the nation,

while the Philadelphia civil court system is ranked the fifth worst in the country in terms of legal fairness.

So says a new survey released this week by the Institute for Legal Reform, an arm of the U.S. Chamber of Commerce.

The ILR’s Lawsuit Climate 2012 study shows that Pennsylvania has fallen six spots to number 40 in the survey, ranking it among the country’s worst legal climates.

“Pennsylvania stands geographically between the nation’s worst legal climate in West Virginia, and its best in Delaware,” U.S. Chamber Institute for Legal Reform President Lisa A. Rickard said in a statement announcing the survey’s results. “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.”

The ILR owns the Pennsylvania Record.

Groups that represent business interests share continued concern that a state’s poor legal climate can, and will, negatively impact decisions such as where to set up shop or expand a business.

Gene Barr, who heads up the Pennsylvania Chamber of Business and Industry, is one such proponent of continued legal reform in the Keystone State, constantly calling for legislative action on additional lawsuit abuse reform.

“Modifying the unfair legal doctrine of joint and several liability needed to be done in order to bring Pennsylvania in line with steps the majority of other states have taken to restore the balance to their legal systems,” Barr said in prepared remarks when the ILR’s survey results were released on Sept. 10. “But as this year’s study points out, we can’t stop there.”

The joint and several liability issue was tackled early last summer after Gov. Tom Corbett signed what has become known as The Fair Share Act into law.

The legislation says each defendant found liable in a civil case only has to pay their share of the liability as long as the jury finds them less than 60 percent at fault.

If a defendant is found 60 percent or more liable, that defendant can be required to pay 100 percent of the damages if the other defendants cannot afford it.

In the past, a defendant who may have only been found 1 percent liable could have potentially been on the hook for the totality of damages if the other defendant or defendants couldn’t pay.

Groups like the Pennsylvania Medical Society supported that piece of reform legislation.

Now, groups like PMS and the Pennsylvania Chamber of Business and Industry are standing behind so-called “forum shopping” legislation, which concerns the ability of plaintiff’s attorneys to pick a venue of their choosing in which to file a lawsuit, typically a personal injury claim.

Forum shopping was previously tackled, at least in part, with regard to medical malpractice cases, after the state Supreme Court ruled those cases can only be filed in a county in which the alleged cause of action first arose.

The rules change led to a decrease in medical malpractice cases in Philadelphia County, the court system that has gotten the ire of the Institute for Legal Reform.

The ILR says that its latest survey ranking Pennsylvania near the bottom as far as legal climate is concerned could be largely attributed to what it calls the “problematic practices” at the Philadelphia Court of Common Pleas, which is part of Pennsylvania’s First Judicial District.

Those so-called problematic practices include a surge of out-of-state plaintiffs that have come into the city’s court system, which, in 2011, accounted for nearly half of all asbestos cases and more than 80 percent of pharmaceutical cases, according to the ILR.

“Philadelphia is well established as a destination for ‘litigation tourism,’” said the Pennsylvania Chamber of Business and Industry’s Barr. “With a pro-plaintiff reputation, its court system encourages forum shopping, accepting cases that have no reason to be tried in that jurisdiction other than for the promise of a jackpot payout for plaintiffs’ attorneys.”

Barr claims that this surge of out-of-state plaintiffs with no other connection to the Philadelphia court system clogs the courts and prevents city residents utilizing the system from receiving timely justice.

“The unpredictable climate created by shopping lawsuits to find the most favorable venue further hinders business investment and job creation,” Barr stated. “The practice is counter to what is needed to create a climate for job creators that encourages economic growth.”

Some have a different view.

Scott Cooper, an attorney with the Harrisburg firm Schmidt Kramer and president of the Pennsylvania Association for Justice, the state trial lawyers’ association, said that dire predictions of businesses being adversely affected if continued civil justice reform fails to take place simply haven’t come to fruition.

Cooper points to the insurance industry as one such example. Since the passage of The Fair Share Act, he claims, not one insurance company has come out and said they’ve lowered premiums or hired more employees, something they said would occur if joint and several liability reform was passed, which it has been.

While the ILR survey paints a not-so-pleasant picture of Philadelphia courts in particular, Cooper countered by saying at least that court system runs efficiently as opposed to Common Pleas Courts in other Pennsylvania counties.

“They do run a tight ship,” Cooper said. “You get a scheduling order, you get a trial date … the insurance companies can’t delay things.”

As for the survey itself, Cooper cautioned that it could be viewed as one-sided given that a pro-business organization is behind the study.

He likened it to taking a “thousand plaintiff’s lawyers” and surveying them on the insurance industry.

“They basically try to throw the baby out with the bath water,” Cooper said of the study’s authors.

Nevertheless, forum shopping reform advocates continue to be unabashed in their opposition to the practice.

Forum shopping legislation has made some headway in the Pennsylvania General Assembly in the form of House Bill 1976, which deals with where a plaintiff can bring a personal injury claim, passing the House Judiciary Committee in December of last year, but proponents are hoping the proposed legislation continues to receive traction and is eventually signed into law.

As for the ILR survey, it ranked Delaware as having the best lawsuit climate.

New York came in at 18, Ohio ranked 30th, New Jersey and Maryland ranked 32nd and 33rd respectively, and Pennsylvania came in at 40th.

Louisiana and West Virginia ranked 49th and 50th respectively.

Aside from the Pennsylvania Chamber of Business and Industry and the Pennsylvania Medical Society, other area groups that support legal reform in the state include the Greater Philadelphia Chamber of Commerce, the Pennsylvania Manufacturers Association, the Pennsylvania Hospital and Health System Association, the Pennsylvania Business Council, the Pennsylvania Health Care Association, as well as the National Federation of Independent Business.

The ILR’s recent survey was handled by Harris Interactive, which conducted the survey, officially titled Lawsuit Climate 2012: Ranking the States, by phone and Internet between the months of March and June of this year.

The respondents – general counsels, senior attorneys or leaders in companies with annual revenues of at least $100 million – were asked to rank states for their overall treatment of tort, contract and class action litigation, according to the ILR.

Among other things, the respondents ranked states on the topics of impartiality, judicial competency and jury fairness.

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