Lisa Rickard and Steve Roberts: State writes new volume in lawsuit history

September 10, 2015

The book on West Virginia’s terrible litigation climate over the last decade is well-known and oft-cited. But with its historic legislative session this year, The Mountain State is writing a new volume, and the early reviews are very promising.

In fact, we suspect that this week’s release of the U.S. Chamber Institute for Legal Reform’s survey of the 50 state lawsuit climates, which finds West Virginia ranked 50th as it has for the past decade, could be the last chapter of the old book.

The 2015 Lawsuit Climate Survey was being completed just as the West Virginia Legislature and Gov. Earl Ray Tomblin were deciding that enough was enough, and it was time to dramatically improve the state’s litigation environment.

The state passed major new legal reform laws, including:

Joint and several liability reforms, which will give businesses and individuals in West Virginia confidence that they will not be held liable for more than their fair share of financial responsibility in a lawsuit.

A new cap on punitive — think “punishing” — damage awards of the greater of four times the amount of compensatory damages or $500,000, which will take away the incentive for plaintiffs’ attorneys to seek lottery-sized awards.

And asbestos bankruptcy trust transparency reforms, which will prevent future fraudulent and abusive claims on the finite resources intended for asbestos victims.

The robust collection of legal reform measures enacted this spring is perhaps the strongest and quickest turnaround imaginable.

Partly this is due to the tidal wave of change that has swept over the state. For more than a decade, the plaintiffs’ lawyers in West Virginia had a stranglehold on the levers of power. They pulled those levers consistently to defeat any changes to the legal system. This is not surprising since they benefited immensely from the old system that enriched a few, often at the expense of many.

The Legislature quickly passed common sense bipartisan legal reforms that were signed by the governor. While these had been blocked over the last decade by the plaintiffs’ bar, many of the proposals had long ago been adopted by other states.

West Virginia’s turnaround begins the process of real repair to the state’s reputation and starts to build a state that is “open for business” in truth, not just a slogan on billboards.

This is important because a state’s lawsuit climate matters to its economy more than ever. Seventy-five percent of business lawyers surveyed said a state’s lawsuit environment is likely to impact important business decisions at their company, such as where to locate or expand their businesses. This is an all-time high.

Still to come should be the creation of an intermediate court of appeals.

West Virginia is one of only two states without an appeals court. This would ensure that justice is always double-checked and would ameliorate the headwind currently created by the West Virginia Supreme Court, as it tends to issue outlier rulings.

In addition, the Legislature should consider reforms to medical liability laws to ensure damage awards are commensurate with actual medical costs incurred and that non-negligent parties are protected.

After more than a decade, West Virginia legal reform won this year. The new book is written. And while there is also hope for a sequel, the outcome of this turnaround effort will certainly be an improved legal climate that will ultimately make the Mountain State one of the nation’s best sellers.

Lisa A. Rickard is president of the U.S. Chamber Institute for Legal Reform. Steve Roberts is president of the West Virginia Chamber of Commerce.