ALBANY, NY(07/13/2012) — A newly released survey from CNBC ranks New York State dead last in business friendliness in theUnited States.
The survey assessed perceived business friendliness based on the legal climate and state regulations.South Dakotaranked highest, followed byNew Hampshire,Virginia,North Dakota, andIndiana.
The survey reaffirms the link between lawsuits and a state’s business climate. States such as New Yorkand New Jerseywhich rank poorly in business friendliness also have costly and unpredictable legal climates. A 2010 report by the Pacific Research Institute on individual states’ tort climates ranked New York 49th out of 50, while New Jersey ranked 50th.
The risk of multi-million dollar lawsuits creates a strong incentive for businesses to locate elsewhere. Tom Stebbins, Executive Director of the Lawsuit Reform Alliance of New York noted, “New Yorkis one of the worst places in the nation to be sued – our system is stacked against defendants, and businesses are well aware of that. They would rather be almost anywhere butNew York, and that’s reflected in our job creation numbers.”
Business advocates and legal reform groups continue to call for improvements toNew York’s legal system. In October 2011, a study by the U.S. Chamber of Commerce predicted that even a moderate reform – such as preventing lawyers from filing suits in jurisdictions with no connection to the case in the hopes of receiving a larger verdict – could create between 75,000 and 212,000 new jobs.
Advocates note that states such asTexas, which have limited subjective “pain and suffering” awards, strengthened evidentiary standards, and curtailed personal injury lawyer’s influence over lawmakers have a significant competitive advantage over other states.
“If New York is serious about attracting new businesses,” said Stebbins, “we’ve got to start by fixing our legal system. This report shows that we are far behind the rest of the country.”