Tennessee ranked best for business in tort liability study

On June 26, 2008, in News 2008, by Mark Norris

By: Dave Flessner, TimesFreePress.com June 26, 2008 Tennessee is the most business-friendly state when it comes to litigation, according to a new study. In its annual boardroom guide to state litigation climates, the American Justice Partnership Foundation listed Tennessee as the state with the lowest risks of lawsuits against business. The foundation, a group that […]

By: Dave Flessner, TimesFreePress.com
June 26, 2008

Tennessee is the most business-friendly state when it comes to litigation, according to a new study.

In its annual boardroom guide to state litigation climates, the American Justice Partnership Foundation listed Tennessee as the state with the lowest risks of lawsuits against business.

The foundation, a group that advocates litigation reform to limit liability risks and costs for businesses, said Tennessee had a relatively low rate of litigation against corporate interests last year. State courts were judged to be more favorable for business than in many other states, according to the foundation, which uses court filings and judicial decisions to compile its list.

“We’re moving in the right direction,” said state Sen. Mark Norris, R-Collierville, who pushed a measure through the Tennessee Legislature this year to limit medical malpractice filings.

The state’s trial lawyers, however, said Tennessee’s favorable ranking in the business litigation climate proves that the state’s existing laws don’t need to change.

“We have thoughtful juries in Tennessee that don’t go off the deep end,” said Daniel L. Clayton, a Nashville attorney who is chairman of the Tennessee Association for Justice. “I think this study supports the fact that Tennessee doesn’t need any other type of reform to its judicial system and should reject efforts to put artificial limits on what citizen juries can decide.”

Tennessee moved up this year from 11th place to first place among the 50 states, the study said. The improvement reflects both lower liability insurance loss ratios and the recent adoption of legislation to limit some types of lawsuits, according to data compiled by Pacific Research Institute.

The favorable record for liability suits is helping to reduce premiums for most medical malpractice insurance plans this year, although the Tennessee Chamber of Commerce and Industry is still pushing for caps on punitive damage awards, according to Chamber President Deborah K. Woolley.

But authors of the report suggest Tennessee may need more limits to avoid costlier lawsuits against businesses in the future.

“While the state’s liability climate encourages growth and job creation, it’s also a state to watch because its tort laws do not place limits on non-economic and punitive damages,” the American Justice foundation report concluded.

Despite Tennessee’s improvement for business, the foundation lowered its rankings for neighboring Georgia and Alabama. Georgia declined from 21st to 28th and Alabama fell from 40th to 41st among the 50 states.

The report said Georgia had been improving its liability climate for business, but authors called Georgia’s Supreme Court “one of the most activist high courts in the nation” and blamed it for dismantling tort reform measures and substituting its judgment for that of the Legislature.