ATRA: Worst States for Liability Systems are Home to ‘Judicial Hellholes’

March 9, 2005

A ranking of state liability systems reveals states rated low in 2005 are also home to Judicial Hellholes, according to the American Tort Reform Association (ATRA).

“We’re not surprised to see that states ranking low in this year’s liability ranking report are also home to Judicial Hellholes,” said ATRA President Sherman Joyce. “However, states that have enacted meaningful civil justice reform are showing signs of improvement with business returning to those states and medical liability premiums going down or stabilizing.”

ATRA released the 2004 Judicial Hellholes report Dec. 15, 2004.

According to the report, the abusive and unfair practices endemic to Madison County, Illinois, have infected neighboring St. Clair County, where the number of class action lawsuits filed in the past two years has increased by an astounding 1100%. This is the first year that St. Clair County has been named a Judicial Hellhole. It is now #2 on the report’s list.

Illinois came in at #46 in the U.S. Chamber of Commerce and the U.S. Chamber Institute for Legal Reform “State Liability Systems Ranking Study” released this week. The state has sunk from #34 in 2002.

“Judicial Hellholes are courtrooms throughout the United States where the law is not applied evenhandedly to all litigants,” said ATRA General Counsel Victor Schwartz. “Litigation tourists, guided by their personal injury lawyer travel agents file lawsuits in Judicial Hellholes because they know they will receive a large reward, a favorable precedent, or both. Defendants declare good reason to fear when sued in Judicial Hellholes.”

“Judicial Hellholes contribute to a state’s overall business climate. Mississippi and Texas, on the other hand, are showing signs of hope, despite both states’ low rankings this year,” said Joyce.

Since Texas enacted comprehensive civil justice reforms in 2003:
* 15 companies have entered the market or will soon.
* The state’s largest medical liability insurer reduced rates by nearly 17 percent.
* Other medical liability insurers are lowering rates.
* State’s largest liability carrier for hospitals reduced rates by 15 percent last year.
* It is easier to recruit physicians since reforms passed.

Since Mississippi enacted comprehensive civil justice reforms in 2004:
* The state’s largest insurer will not raise medical liability rates in 2005.
* St. Paul Travelers told the state insurance commissioner they are returning to Mississippi because of the tort reform enacted in 2004.
* World Insurance Company and Equitable Life Insurance Company have already returned to the state.
* Mass Mutual Life Insurance Company has announced plans to return to the state.
* New businesses have been recruited to the state since the 2004 reforms were enacted.

Other states are working to pass similar reforms as the Georgia governor recently signed a comprehensive bill into law.

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