Delaware fell from the top spot when it comes to the state’s litigation climate for business.
The findings came from the 2017 Lawsuit Climate Survey: Ranking the States was conducted for the U.S. Chamber Institute for Legal Reform by Harris Poll.
The state had long held the first place slot.
“Delaware is ranked #11 in the 2017 Lawsuit Climate Survey: Ranking the States, falling ten spots from first place, a position it had held every year since the survey was first released in 2002,” the report noted.
“Despite this fall, Delaware still ranks in the top ten in the key element categories of scientific and technical evidence, trial judges’ competence, quality of appellate review, and enforcing meaningful venue requirements,” the report stated.
The results are based on interviews with a national sample of 1,321 in-house general counsel, senior litigators or attorneys, and other senior executives who are knowledgeable about litigation matters at public and private companies with annual revenue of at least $100 million.
The study noted that the litigation climate is a factor in decisions by businesses to locate to a state.
Delaware is heavily dependent on revenue that arises from its incorporation and legal system, which includes Chancery Court, the nation’s top business court.
There have been murmurs in recent years that three decades of Democratic control in the state have produced a less business-friendly legal climate and an emphasis on social legislation.
The ranking caught the attention of Citizens for a Pro-Business Delaware, a group seeking a change in corporate law over sales of profitable companies. The law seeks a three-year cooling off period for forced sales, if the company is profitable.
Citizens for a Pro-Business Delaware Campaign Manager Chris Coffey made the following statement:
“This shows what we have been saying for months, that the TransPerfect case and other similar cases are having a serious impact on Delaware’s standing as a business-friendly state. Delaware’s economy cannot afford to lose its incorporation industry and the billion dollars in revenue it adds to the state’s economy. There is more room left to fall if the Delaware Court does nothing to stop thousands of American jobs from going overseas.”