While not everything in Connecticut may appear welcoming to business, a new survey found that one thing is—the state's lawsuit climate.

A U.S. Chamber of Commerce Institute for Legal Reform survey released this week on state lawsuit climates ranks Connecticut 16th in the nation, a noteworthy jump from 22nd last year and 25th in 2012.

State lawsuit climate rankings
2017 ranking of state liability systems. Source: U.S. Chamber of Commerce Institute for Legal Reform.

It's significant because a state's liability environment can have a large impact on its business climate.

"These perceptions matter because they can be influential in business decisions about where to conduct, expand, or constrict business operations or sales," the institute said in its report.

"Most of the respondents in this survey (85%) report that a state's litigation environment is likely to impact important business decisions at their companies, such as where to locate or do business.

"This is a significant increase from 75% in 2015, and 70% in 2012."

The survey by global polling firm Harris Interactive queried 1,321 in-house general counsels, senior litigators, or attorneys at major companies and ranked their liability perceptions.

The respondents were from companies with annual revenues of at least $100 million.

Grading the System

Survey participants were asked to grade, from A to F, specific areas of judicial systems, including:

  • Overall treatment of tort and contract litigation
  • Treatment of class-action and mass-consolidation suits
  • Damages
  • Trial judges' impartiality
  • Trial judges' competence
  • Juries' fairness
  • Quality of appellate review

States not keeping up on legal reform are being passed by.
These elements were combined to create the state rankings.

That 85% of attorneys surveyed said a state's lawsuit environment is likely to impact important business decisions shows that states should realize a good lawsuit climate is vital to continued job growth, said Lisa A. Rickard, president of the Institute for Legal Reform.

She noted that the survey indicates state lawsuit climates are improving overall, and that states, realizing the impact on their economies, are working harder to improve their litigation environments.

"If this were a marathon, the pack of runners would be tightening, and running faster," Rickard said.

"States not keeping up on legal reform are being passed by."

South Dakota First

South Dakota ranked first in the survey and three other New England states—Vermont (2), New Hampshire (5), and Maine (9)—ranked in the top 10.

Florida (46), California (47), and Illinois (48) ranked near the bottom with Louisiana listed as having the worst liability climate in the nation.

The U.S. Chamber began studying state lawsuit climates in 2002 and did its first survey in 2010. Before that, information on a particular state's lawsuit climate was largely anecdotal.

The ranking attempts to measure how corporate attorneys view a state's legal system.

As the overall scores of states improve, the senior attorneys and executives who responded see, in general, a litigation environment that's improving.

In fact, 63% of respondents rated the fairness and reasonableness of state court liability systems in the United States as excellent or pretty good, up from 50% in 2015 and 49% in 2012.

The remaining 36% view the system as only fair or poor, and 1% declined to answer.

Connecticut Judges Rate High

Connecticut judges fared well compared to other states, ranking 10th overall in impartiality and ninth in competence. Connecticut's quality of appellate review was ranked eighth in the nation.

The survey also listed the cities or counties with the least fair and reasonable litigation environment. The worst five are: Chicago or Cook County, Ill., Los Angeles, Jefferson County, Texas, New Orleans or Orleans Parish, and San Francisco.

Idaho was found to have the most impartial judges while Vermont's state judges were ruled the most competent.

"Clearly, corporate counsel sees specific areas needing improvement in the individual states, and the perceptions of senior lawyers and executives in large companies matter," the survey's executive summary says.

"The challenge for the states is to focus on those areas where they received the lowest scores and then make improvements where needed."