NJLRA News Alert

The Pacific Research Institute (PRI) Ranks New Jersey #49 of the 50 States for its Civil Justice Climate

In March, the Pacific Research Institute released the “U.S. Tort Liability Index: 2008 Report,” which measures the best and worst tort systems in America. New Jersey ranked 49th of the 50 states, further cementing our reputation as a plaintiff friendly state. Coming on the heels of the American Tort Reform Association’s “Judicial Hellholes” report, which concluded that Atlantic County, New Jersey is one of the six “Hellholes” in the United States, PRI’s report demonstrates that experts around the nation are taking note of what our own businesses already know: that New Jersey’s civil justice system is in dire need of reform (for more information about how our own businesses, view NJ’s civil justice system, click here).

According to the PRI report, “The U.S. Tort Liability Index: 2008 Report measures which states impose the highest, and the lowest, tort liability costs both in absolute and in relative terms. The study also measures relative litigation risks across states. Finally, it examines which states have rules on the books that, if implemented and enforced, reduce lawsuit abuse and tort costs, resulting in a more balanced and predictable civil-justice system.” The report ranks NJ 6th worst in the nation in absolute monetary tort losses, behind only California, New York, Florida, Texas and Illinois. The report also specifically mentions New Jersey’s lack of a Federal Daubert standard for reviewing expert evidence before allowing it into court as a high priority reform. NJLRA shares this priority and it actively working to address this issue. 

New Jersey now has the distinction of having a civil justice system that is ranked 49th in the nation by PRI, 35th by the U.S. Chamber’s Institute for Legal Reform, is home to one of six “Judicial Hellholes” in Atlantic County, and where one-in four of our own businesses have considered leaving the state because of that system. Our tort system is making it harder to do business in New Jersey and is driving up the cost of goods, services and healthcare for our citizens.

As Hovannes Abramyan and Lawrence J. McQuillan write in the PRI report:

An efficient tort system is an important part of a thriving free-enterprise economy. It ensures that firms have proper incentives to produce safe products in a safe environment, and that truly injured people are fully compensated. An efficient tort system results in greater trust among market participants, leading to more trading, and eventually a higher standard of living for individuals in the society. An efficient tort system benefits all.

A poor tort system, on the other hand, imposes excessive costs on society, not the least of which is foregone production of goods and services. There is growing evidence that U.S. tort costs are far greater than other countries’ costs and that much of the difference is due to excessive litigation and lawsuit abuse. All of us shoulder the burden of an excessively expensive and inefficient tort liability system through higher prices, lower wages, decreased returns on investments in capital and land, restricted access to health care, and less innovation. Businesses that spend more money each year on liability insurance have less money available for research and development or for health benefits for their employees. All of us pay the price, whether we realize it or not.

According to Abramyan and McQuillan, New Jersey’s tort system is worse than 48 other U.S. states. The New Jersey Lawsuit Reform Alliance is the only organization in New Jersey working to address this important problem. Please join us.