June 30, 2007

A Close Call

Tennessee ranked 11th best among the 50 states for its legal climate in terms of liability risks for business, according to Risky Business, a new guide from Directorship magazine and the American Justice Partnership. The guide profiles the political, legislative and judicial dynamics that create the current and future liability risks in each state. Here's what the guide says about Tennessee:

Despite its high ranking, determining whether Tennessee's liability climate encourages or is neutral to growth and job creation was a close call. Insurance loss ratios in the state are only 22nd best in the country. Although the Legislature abolished joint liability except in limited instances, there are no limits on non-economic or punitive damages in Tennessee. The Supreme Court is regarded as having neither a rule of law nor an activist majority and there are some plaintiff-friendly venues in the state.

"Board directors need to understand which states have created predatory liability laws that will ensnare their companies in costly and protracted litigation," says Jeff Cunningham, Publisher of Directorship magazine. "Directors, on behalf of shareholders, need to make good decisions about in which states to expand operations and increase employment. We asked Steve Hantler to partner with us on the Guide because through AJP he has the best network of in-state Partners who are the experts on their respective state legal climates."

"Our goal for the Guide is to provide board directors and other company decision-makers with a high-level understanding of risks arising because of the legal climate in each state," says lead author Steve Hantler, right, Chairman of the American Justice Partnership. "While directors will need more detailed information before making major decisions about where to site facilities, this Guide provides an expert summary of the environment in all the states."