Lawsuit Reform

Sneak Peek: Lawsuit Reform for Competitive State Economies Being Released Next Week

The last quarter century has seen a significant decline in the number of legislators with law degrees, down to only 17.2 percent of legislators currently. Whether you think this is a good thing or a bad thing, it remains that more state legislators could use “job training” to grasp a basic understanding of legal issues they are likely to consider. The more they understand, the better they can evaluate how to improve it.

Next week, the Council will release “Lawsuit Reform for Competitive State Economies” to that end. It explains in simple non-legalese the lawsuit process and the basics of the system. Beyond this, the publication highlights specific reforms that can be considered for improvements to state legal systems. And each section clearly lays out the problem, assesses the Council’s policy solution and provides a number of other insights into the arguments for and against these policies. With a full picture of the lawsuit environment, it is the Council’s hope that legislators can make more informed decisions. Lawsuit reform is a daunting issue no longer!

And, moreover, it’s a core economic issue. Businesses list a state’s lawsuit environment as one of the important factors considered when deciding whether and where to open shop. From the Guide:

“States with predictable legal systems that discourage abuse will be more competitive, and the Council’s model policy is crafted with such a purpose. Fostering reliable justice will in turn promote a fair business climate and pave the way for job creation.”

The other night I turned on the TV to watch Shark Tank, a reality TV show that puts entrepreneurs in front of a panel of venture capitalists to seek investors for their start-up companies. In this episode, two former engineers had developed an at-home tattoo removal system. The venture capitalists were heartily impressed but every single one backed out of the deal citing liability concerns. They were afraid that a business with no lawsuits at present would become a business with many lawsuits once their deep pockets were legally bound to it.

Now, obviously, this is a reality TV show, something I usually take with a grain of salt. But being an attentive lawsuit reformer, I do take note of the concerns of the business savvy where they mirror those expressed by business owners in nearly every lawsuit survey I’ve come across. Liability concerns are a pressing issue for many businesses and the Council’s upcoming publication includes reforms to lessen these concerns while preserving the fundamental, free-market function of the lawsuit system.

In Depth: Lawsuit Reform

State legal systems and the liability they exert on businesses and individuals are a disincentive to bad behavior and allow fair players to succeed in the marketplace. When lawsuits inappropriately punish good actors, resources are sucked out of the business economy, away from research & development and job creation. Lawsuit…

+ Lawsuit Reform In Depth