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Ky judicial climate bad for business, execs say in study

Ky judicial climate bad for business, execs say in study

by News Release

WHAS11.com

Posted on September 21, 2012 at 8:12 AM

(News release) - Partnership for Commonsense Justice --  September 20, 2012 - A new study released this month indicates that Kentucky's legal climate is perceived as one of the worst in the nation by executives who influence decisions about where companies will create jobs.

As it has for all but two years since the U.S. Chamber's Institute for Legal Reform (ILR) began conducting surveys in 2002, Kentucky's judicial climate ranks in the bottom third of all the states. The 2012 survey ranks Kentucky 38th.

The ILR's 2012 State Liability Systems Survey explores how reasonable and balanced state tort liability systems are perceived by business leaders.

“We have a lot of strikes against us when we are trying to convince companies to bring jobs to Kentucky,” says Doug Alexander, executive director of the Partnership for Commonsense Justice, a non-profit association dedicated to promoting fairness and excellence in Kentucky's legal system. “The fact that business leaders perceive Kentucky's judicial climate as one of the worst in the nation is one of the biggest hurdles we have to overcome in economic development.”

In addition to the overall ranking, respondents were asked to give states a grade in each of the following areas: overall treatment of tort and contract litigation; having and enforcing meaningful venue requirements; treatment of class action suits and mass consolidation suits; damages; timeliness of summary judgment or dismissal; discovery; scientific and technical evidence; judges’ impartiality; judges’ competence; and juries’ fairness. They were also asked to give the state an overall grade for creating a fair and reasonable litigation environment. These elements were then combined to create an overall ranking of state liability systems.

The speed and efficiency of a state's legal process is one of the areas cited most frequently as influencing perception of a state's judicial climate and it is the area in which Kentucky received its lowest ranking (44th) among the ten specific areas measured.

Kentucky is also among a minority of states that does not have a state law that requires “clear and convincing” evidence of wrongful conduct to support damage awards. A decision in 1988 by the Kentucky Supreme Court which invalidated such a law may be a significant factor contributing to an increase in the number of lawsuits filed in Kentucky over the last several years.

The American Bar Association and the United States Supreme Court have encouraged states to adopt the clear and convincing standard.

Kentucky is feeling the affects of a legal system perceived to be inefficient. Extendicare Health Services, one of Kentucky's largest providers of long-term care, announced in May that it is leaving the state citing “the combination of a worsening litigation environment and the lack of any likelihood of tort reform” as the principle factor.

Participants in the survey were drawn from a national sample of 1,123 in-house general counsel, senior litigators or attorneys and other senior executives at companies with at least $100 million in annual revenues. Seventy percent of those responding reported that a state's litigation environment is likely to impact important business decisions at their companies.

The ILR study can be downloaded at http://www.instituteforlegalreform.com/sites/default/files/lawsuit-climate/17834_FinalWeb_PDF.pdf.

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