West Virginia on the Road to Being �Open for Business�

By The West Virginia Record | Dec 1, 2005

For years, the people of West Virginia have been bombarded with bad news and troubling statistics about their state’s economy, its legal climate and its jobs crisis. So it’s understandable that some cheerful news this holiday season would be a welcome change of pace.

You’re in luck. Recent action by Governor Manchin and the state legislature is sending signals that West Virginia is on the road to becoming “Open for Business.”

The root of many of the state’s economic problems has been its abusive legal climate. For years, lawyers from all over the U.S. looking to make a quick buck have been filing frivolous lawsuits in West Virginia. While they’ve been collecting big time legal fees, West Virginia’s courts have become clogged with junk lawsuits, employers have been forced to cut jobs, and families are paying higher prices for goods and services.

West Virginia’s tolerance for lawsuit abuse is well-known. It has ranked 49th out of the 50 states for four years running in the U.S. Chamber Institute for Legal Reform/Harris Poll ranking of legal fairness and companies avoid doing business in the state because they are afraid of being sued.

For all of these reasons, significant legal reform in West Virginia is long overdue.

Knowing this to be true, the Governor and the legislature took a major step forward last spring by enacting incremental reforms to the state’s civil justice system. These new laws include important insurance reforms that have already helped to make auto and homeowner’s insurance more affordable, as well as legislation giving certain defendants a fair chance to fix a problem before they can be sued for it.

Governor Manchin and the state legislature deserve a round of applause for enacting these important reforms, as well as our support in their efforts to enact more comprehensive legal reforms that will fully restore fairness and balance to the legal system and make West Virginia more competitive in the fight to bring jobs and investment to the state.

With additional legal reforms, West Virginians can enjoy the same level of success we’ve seen in Mississippi – perennially the 50th ranked state in the ILR/Harris state ranking – which passed comprehensive legal reform legislation last year.

Since enactment of Mississippi’s reforms last year, four major insurance companies have returned to the state; two major corporations have invested a total of $55 million dollars in the state; a large industrial company with a $3.5 million dollar payroll has returned; and there has been significant business expansion.

As Mississippi State Senator Charlie Ross wrote recently in the Wall Street Journal, the number of lawsuits in his state has decreased to a more reasonable rate, the mass-tort industry is shrinking, and fairness is returning to Mississippi courts. That in turn is leading to lower operating expenses for employers. As Senator Ross mentions, one Mississippi CEO saw his company’s legal bills drop an astounding $70,000 a month thanks to the reforms.

Most importantly, Mississippi’s much-needed legal reforms have been credited with making it easier for its employers and workers to recover from the devastation of Hurricane Katrina.

West Virginians deserve the same opportunities, and legal reform will improve the state’s economic climate for employers, consumers, and working families.

Enactment of more legal reforms won’t be easy. Self-interested trial lawyers will fight hard to preserve the court system that has made them – and them alone – rich. That is why West Virginians should lend their support to common sense legal reforms that will help create a promising economic future for the state and all of its deserving residents.

By working together, we can win this fight and ensure that West Virginia is truly “Open for Business.”

Lisa A. Rickard is president of the U.S. Chamber Institute for Legal Reform.

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