Delaware ranked as the state having the most fair and reasonable legal system for corporations, while Illinois ranked the worst in a recent survey. It was closely followed by Louisiana, California, Mississippi and Florida as unfriendly legal climates.

The U.S. Chamber Institute for Legal Reform released its "2019 Lawsuit Climate Survey: Ranking the States" on Tuesday evening. A record 89% of survey participants said a state's lawsuit environment is likely to impact their companies' decisions about where to locate or do business.

This number increased from 85% in the 2017 survey and 75% in 2015. This is the institute's 12th survey.

The survey, conducted by the Harris Poll, questioned 1,307 general counsel, senior litigators or attorneys, and other senior executives who are knowledgeable about litigation matters at public and private companies with an annual revenue of at least $100 million.

"The survey should be a wake-up call to policymakers that their state's economic growth and prosperity depend in large part on the fairness and predictability of its legal system," said Harold Kim, chief operating officer of the U.S. Chamber Institute for Legal Reform.

Kim told Corporate Counsel that when Texas made legal reforms several years ago under then-Gov. George Bush, the state saw a huge boost in economic development, including by technology and health care companies.

Kim added, "States like Illinois are pariahs to companies. Illinois' lawsuit system is so bad, major tech companies are refusing to sell some of their products there."

Some plaintiffs attorneys question such claims, including Kenneth Lumb, managing partner at plaintiff's law firm Corboy & Demetrio in Chicago. Lumb suggested the poll group was one-sided. "A survey of in-house lawyers who would love to avoid responsibility for the harm caused by products like e-cigarettes or opioids is hardly scientific," he said.

Lumb also challenged statements about the impact on the state's economy. "The truth is that over the past 10 years, Illinois' economy has been growing faster than its neighbors, and the fear of lawsuits does not even appear on the radar screen when businesses decide where to locate," Lumb said.

The institute cited several factors in Illinois' worst ranking, including the state's litigation-friendly Biometric Information Privacy Act, which allows individuals to bring suits through, even if they suffered no injury.

Kim said this law worries Google and Sony so much that they have withheld products, such as facial recognition apps and certain devices with live cameras, from being sold in Illinois.

The report also cited Illinois as "a magnet for asbestos litigation," with Madison County being the most popular jurisdiction in the country to file asbestos claims. In 2018, 27%—or more than one in four new asbestos lawsuits in the country—were filed in Madison County, the report said.

Here is how some other states fared:

• Delaware earned the top spot thanks mainly to its respected Chancery Court. Specifically the report said the court has reined in frivolous lawsuits, including disclosure-only settlements in merger and acquisition suits.

"Hands down, Delaware has some of the most competent and experienced judges and [the most] stable legal system in the country," Kim said.

• He said Missouri, ranked 44th, continues to be a problematic state "because of its jaw-dropping verdicts, ridiculous class action lawsuits, and courts who welcome out-of-state plaintiffs." Missouri has made some improvements to reduce forum shopping and other legal system abuses, he said, but "there is still much work to be done."
• Florida's ranking at No. 46 is expected to rise considerably in the next few years. The report cited the Florida Legislature passing legal reform bills in April aimed at curbing insurance fraud, and the Florida Supreme Court in May adopting a rule to keep junk science out of Florida courtrooms—already law in 40 other states and in federal courts.

Kim said he will be in Florida on Wednesday for a joint press conference with Florida Gov. Ron DeSantis.

• California, at No. 48, "is racing to the bottom," Kim said, and he expects its legal climate to worsen. "California has created a lucrative lawsuit industry where plaintiffs' lawyers prey on" business, he added.

Kim said when the California Consumer Privacy Act goes into effect in 2020, "it will usher in an even bigger flood of lawsuits."

The poll asked respondents to grade states in 10 legal areas, including damages, impartiality of trial judges and use of scientific and technical evidence. The grades were combined to create the overall ranking, but the report also broke down how each state did in each of the 10 areas.

"The challenge for the states," the report said, "is to focus on those areas where they received the lowest scores and then make improvements where needed."