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Study: Cook among worst legal climates

Friday, September 11, 2015
Chicago Daily Law Bulletin
by Lauraann Wood

A national survey by a pro-business group ranks Illinois’ civil lawsuit climate among the nation’s worst. But the study quickly drew criticism from some officials who experience the court daily.

The survey, released Thursday by the U.S. Chamber of Commerce’s Institute for Legal Reform, listed Illinois ahead of only Louisiana and West Virginia in its ranking of the country’s best and worst tort-liability systems.

The survey results were heralded in a news conference at the Thompson Center with Gov. Bruce Rauner and ILR President Lisa A. Rickard, Illinois Chamber of Commerce President Todd Maisch and Illinois Civil Justice League President John Pastuovic.

The study’s 1,203 corporate-counsel respondents — whose companies each report at least $100 million in annual revenue — graded their respective trial court systems on factors such as damage awards, scientific and technical evidence allowance, judge competence and both judge and jury impartiality.

Illinois’ rank this year marks its lowest since ILR began conducting the survey, dropping two spots since the last survey in 2012 and 14 since the ILR’s first examination in 2002.

About 20 percent of respondents deemed Cook County’s lawsuit climate as the worst in the country, second only to courts in eastern Texas that received 26 percent of respondents’ votes. Downstate Madison County — which came in fourth place — received about 16 percent of votes.

Responding counsels primarily cited biased judges or partial juries as their reason behind naming a least-fair jurisdiction. Others cited poor jury and judge quality, excessive damage awards and an overall slow judicial process.

And according to about 75 percent of survey responses, a state’s lawsuit climate can likely impact significant business decisions such as where to set-up, move or expand.

At the event, Michael Ducker, the president and CEO of FedEx Freight who also chairs the chamber’s board of directors, said he was not surprised to see such a number.

Ducker called for a legal and regulatory structure that “allows innovators to innovate” without encountering “unnecessary red tape” and threats to shut down within two years.

“The fact of the matter is that lawsuits are playing all too important a role in our day-to-day decision-making as business leaders,” he said. “Business people really want to focus on where we can expand and create new jobs for Americans and open new markets for U.S. businesses. It’s not productive to spend time fighting lawsuits and increased regulations.”

Rauner cited the survey as proof that Illinois needs the “common- sense” reforms he’s been pushing in exchange for approving a state budget — such as restrictions on venue shopping and a higher liability threshold — through most of his nine months in office.

Rauner said many employers he’s spoken with across the state have said their frustration with “lawsuit abuse” and their insurance liability costs is pushing them to leave the state. That sentiment is often reiterated, he said, when he travels across the country to recruit businesses to come to Illinois.

“The employers are scared to come here,” he said. “Come here, and you open yourself up to attack and excessive judgments against your company.”

However, members of Cook County’s legal community pushed back on the survey’s claims.

Cook County Circuit Judge James P. Flannery Jr., the presiding judge of the Law Division where many of the multimillion-dollar cases are heard, said in the hundreds of cases he’s worked on, defendants come out of trials “victorious” about two-thirds of the time.

“I don’t mean that they won all those cases,” he said. “What I mean is that they either won a straight-out defense verdict, or the jury came back with a verdict that was less than the amount that was offered by the defense (in settlement negotiations).”

Flannery said his primary disagreement with the survey is because he feels the judges he knows across the state are “very impartial.”

“I don’t know of one judge who goes into a case saying, ‘Boy, I sure hope the business loses here and the working person wins,’” he said. “It seems to me that what the survey says is when you’re saying a judge isn’t impartial, you’re saying that the judge has a preconceived outcome that he or she wants going into the trial, and I disagree with that.”

Another aspect to note, he said, is that the survey is based on the responders’ perceptions of the various states.

“When you’re talking about perception — right there — sometimes perception is reality, but more often than not, perception is not reality,” he said.

And the Law Division’s reality, he said, is that such cases involving product liability that come against large corporations like those whose counsel answered the ILR’s survey don’t comprise “anywhere near” the majority of cases it sees.

“So you can have attorneys who have one or two cases a year, and they’re basing their (responses) on whether the legal system is working for their clients, apparently,” he said. “But that’s not the largest percentage of cases we see.”

The bar group representing plaintiff lawyers suggested that the supporters of the survey have ulterior motives.

What the governor won’t mention, Illinois Trial Lawyers Association President Perry J. Browder said in a statement, is the “true motive” behind what Rauner calls lawsuit reform: “putting profits above people.”

“The only lawsuit crisis in Illinois is the one conjured up by the imaginations of phony front groups funded by big businesses trying to saddle the state’s taxpayers with the costs of caring for those who are injured or the survivors of those killed due to corporate negligence or malfeasance,” he said in the statement.

And if large companies were truly worried about the state’s lawsuit climate, ITLA immediate past president Stephen D. Phillips said, Illinois wouldn’t be home to 34 of the nation’s largest companies on the Fortune 500 list of 2015.

Similarly, he said, insurance companies such as Bloomington-based State Farm and Northfield-based Allstate — which netted billions of profit dollars in 2013, according to an ITLA fact sheet — wouldn’t want to make their money susceptible to any kind of hostile lawsuit environment because they would want to preserve as much of it as possible.

“Hellhole? I don’t think so,” he said.

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