Employment may be hurt by Nevada’s legal reputation

Too many lawsuits may be hurting Nevada’s reputation — and costing the state jobs.

A recent study by the U.S. Chamber Institute for Legal Reform ranked Nevada’s lawsuit climate 37th in the country.

“This is an issue that’s of increasing importance at a time when Nevada has the highest unemployment rate,” institute spokesman Justin Hakes said.

Nevada could increase employment by 1 to 2 percent if it were to improve its legal environment, the institute said. That would require making changes to tort, contract and class-action litigation, as well as addressing the perceived competence of judges and juries. Abusive lawsuits and legislation also factored into the ranking.

“Nevada’s product liability law tends to bring in more lawsuits in that area,” Hakes said.

Nevada attained its highest ranking — No. 30 — for timely summary judgments or dismissals. The state landed at No. 44, its lowest ranking, for treatment of class-action and mass consolidation lawsuits. It also ranked 44th for the perceived value state courts place on scientific and technical evidence.

Businesses are looking at states’ legal environments more now than at the start of the economic downturn, Hakes said. Companies’ negative perceptions may reroute businesses to locations that are perceived as more business-friendly.

“Clark County has a reputation as being a place where frivolous lawsuits tend to flood into,” Hakes said.

Nevada has bounced around in the institute’s rankings, landing at No. 40 in 2008 before jumping to 28th in 2010. Hakes said it’s difficult to pinpoint a reason for the fluctuation, but noted that perception surveys used to compile the rankings gauge the attitudes of business attorneys and people familiar with the state’s legal system.

Delaware ranked first in the study, followed by Nebraska and Wyoming. West Virginia was named the worst legal environment in the country, just below Louisiana and Mississippi.

The study also looked at what participants considered to be the worst local jurisdictions in the country.

Chicago earned the distinction of being the “least fair and reasonable” legal environment. Los Angeles, and California in general, ranked close behind, due largely to a perceived bias among judges and juries.

Even so, close to half of the attorneys surveyed said they view the fairness and reasonableness of state court liability systems nationwide as excellent or pretty good.