What would you do with an extra $886 each year? Pay off your credit cards? Get braces for your child? Make an extra mortgage payment?

For anybody, $886 is a lot of money. But that is exactly how much you and every man, woman and child end up paying each year to cover the cost of litigation in America. According to a new survey by Tillinghast Towers Perrin, tort lawsuits – civil cases involving an injury or wrong – cost Americans $260 billion in 2004, or $886 per citizen.

Americans are justifiably outraged by this sobering statistic. They want to know how this happened and what can be done to fix the problem.

In the past decade, more plaintiffs’ lawyers have exploited flaws in our legal system in search of jackpot justice. They tend to sue companies with deep pockets. Then they shop around the country looking for courts and judges who will most likely rule in their client’s favor, regardless of the merits of the case. While clients may or may not end up with a generous verdict or settlement, trial lawyers almost always make out well, taking home millions for themselves.

The U.S. Chamber Institute for Legal Reform is fighting back. One way we do that is by letting the public know which states have the fairest or most balanced legal systems. ILR just released its fifth survey of state liability systems, conducted by Harris Interactive. Over 1,400 corporate counsels ranked the best to worst.

This year’s top five states are Delaware, Nebraska, Virginia, Iowa and Connecticut. And the worst? West Virginia, Louisiana, Mississippi, Alabama and Hawaii. Dishonorable mention goes to Wisconsin, which dropped 13 places in just two years.

Why the ranking? Because companies are reluctant to do business in states with a reputation for lawsuit abuse. And frivolous lawsuits drive away jobs, businesses and doctors. In the end, lawsuit abuse hurts you and your pocketbook.

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