Among the 50 states, Illinois has the worst litigation climatefor business and the highest risk for lawsuits, according to anon-profit business coalition.

The rankings for best and worst states were produced by theAmerican Justice Partnership Foundation (AJP), in collaborationwith the Directorship publication.

According to the group's “Annual Boardroom Guide to StateLitigation Climates,” Tennessee is the best state for doingbusiness.

Steven B. Hantler, AJP chairman, wrote a Directorship articlelisting the 10 worst states for litigation, the 10 best states,five declining states and five improving states.

He warned that companies doing business in states with positivelitigation reputations should not become complacent about reformingcivil litigation. Mr. Hantler pointed to the fact that 10 of the 18states in this year's guide with positive liability climates aretrending downward at a time when tort costs continue to rise.

“To make matters worse, the American Tort Reform Association, anAJP partner, reports a surge in anti-business and pro-plaintifflegislation being introduced in most states in the country,” hewrote.

“The AJP has mobilized in key states to defeat these legislativeproposals, but in view of changes in the composition of statelegislatures as a result of the 2006 elections, some of thislegislation will almost certainly pass,” according to Mr.Hantler.

“The plaintiffs' bar counts on being able to take company CEOsand directors by surprise when they file major lawsuits that arebased on expanded or previously overlooked state liability laws,”wrote Mr. Hantler.

“These plaintiffs' lawyers try to create the 'perfect storm' byfiling lawsuits with unwarranted high demands, while encouragingthe news media to publicize sensational allegations of wrongdoing,”he said. “Their goal is to create severe pressure in themarketplace and thus extort companies into agreeing to settle theclaims for outrageous amounts.”

The “solution,” he suggested, “is for CEOs and directors tounderstand the plaintiff lawyers' playbook and how to beat thembefore there is a litigation crisis.”

AJP found some encouraging notes on this year's findings. Itsaid savvy directors and business executives should take secondlooks at Indiana, Ohio, Nebraska, Tennessee, Texas, Utah andVirginia, which have among the best litigation climates forbusiness.

Illinois' liability climate ranks lowest, according to Mr.Hantler, because “despite successful efforts by the reformcommunity to fend off legislative proposals favoring theplaintiffs' bar, insurance loss ratios and monetary tort lossesrank in the bottom 10 among states.”

According to the article, Illinois has been identified as thehighest at-risk state for new lawsuits. It noted that ATRA hasdesignated two “judicial hellholes” in the state: Cook County(Chicago) and St. Clair County.

Madison County was recently downgraded from “hellhole” statusbased on appellate court elections and the increasing frequency ofrule-of law-judicial challengers in key appellate races.

Liability reform advocates have taken advantage of disarray inlegislative leadership to prevent passage of two anti-reformmeasures. One would have reduced the degree of liability requiredunder the state's joint liability standard. The other would havereduced the effect of Illinois' collateral-source disclosure rule,the article reported.

Listed as worst states were:

1. Illinois

2. West Virginia

3. Rhode Island

4. Pennsylvania

5. California

6. Florida

7. Montana

8. New York

9. Maryland

10. Alabama

Listed as best states were:

1. Tennessee

2. Utah

3. Indiana

4. Ohio

5. North Dakota

6. North Carolina

7. Nebraska

8. Virginia

9. Michigan

10. South Dakota

Listed as improving were:

1. Oklahoma

2. South Carolina

3. Mississippi

4. Louisiana

5. Tennessee

Listed as declining were:

1. Kansas

2. Washington

3. Colorado

4. Hawaii

5. Oregon

The AJP litigation risk analysis, it was explained, is intendedfor board directors and their advisers as they make strategicbusiness decisions, such as where to open an office or plant.

Findings are based on AJP Foundation expertise, combined withthe results of two national research indices: the Pacific ResearchInstitute's 2008 U.S. Tort Liability Index, and the 2008 ILR/HarrisState Liability Systems Ranking.

The AJP describes itself as a national nonprofit coalition ofleading corporations, think tanks, foundations, trade associations,individuals and organizations advocating for liability reform atthe state level.

The group said that working with its partner organizations, AJPimplements research and education initiatives in key states insupport of liability reform campaigns that “have a realistic chanceof success.”