Travis Akin gets a lot of feedback from businesses concerned about the state of the Illinois legal environment and its impact on the economy.
“Last year, I talked to a grocer in Rockford, and he gets sued all the time,” he said. “One woman passed by a refrigerated unit and there was water leaking on the floor. She went ahead and checked out, then returned to the water and ran her foot threw it. She claimed she slipped and fell — and sued.”
A subsequent check of the store’s videotape proved otherwise, but in the end it didn’t matter to the grocer.
“He still had to pay $500 to make the case go away. That $500 could have bought a lot of groceries,” Akin said.
Akin has few friends in the trial lawyer community. He and previous executive directors of Illinois Lawsuit Abuse Watch have been on a years-long mission to rein in frivolous or abusive lawsuits, which contribute to an overall environment that he says is causing businesses to leave the state
Neighboring, reform-minded states like Indiana and Wisconsin have been the beneficiaries, he said. In an op-ed piece that appeared recently in Crain’s Chicago Business, the secretary of commerce in Indiana said some 40 Illinois-based companies have moved to his state during the last few years, bringing 3,600 jobs.
“Absolutely it impacts the economy (in Illinois),” Akin said. “This goes to what I’ve seen and heard from business leaders about how aggressive other states have been trying to lure them from Illinois. Some don’t want to leave, but it’s getting harder and harder to stay here because of the problems we have in Illinois.”
Taxes, regulations, delays in getting questions answered and bureaucracy in general add to the mix, he said.
“We keep giving people reasons to leave, not to stay,” he said.
I-LAW is in the midst of the second year of what it calls its Small Business Summer tour, where Akin goes on the road to draw attention to the need for lawsuit reforms. At least one event is coming up this month in Quincy, he said.
Akin spends a lot of time in Metro East, which has long had a reputation as a “legal hellhole” because of the number of high-dollar, personal injury cases filed. Asbestos injury cases, in particular, continue to be filed here at a record pace, he said.
Not all such lawsuits result in big verdicts; in a few recent Madison County cases the defense has won.
But efforts to raise awareness have had an impact. In the Illinois Republican primary, all four gubernatorial candidates, including the eventual nominee, stressed the need for reforms. Legislators are aware of the issues, too, but the last major challenge to face them, the reform of medical malpractice laws, was in 2005. A law that was passed to cap pain and suffering damages at $500,000 was eventually deemed unconstitutional by the Illinois Supreme Court.
Businessmen in this region are educated on the legal complications, Akin said, and “frustration (with the Illinois system) is growing.”
The situation is particular noticeable in towns that border another state — like those communities in southwestern Illinois. One milk hauling company based in Hecker, Ill., has been adding to its workforce —but in Missouri, a state friendlier to business, Akin said.
“For small-business owners, a lawsuit can really damage their financial standing,” he said. One woman told me that if she knows what the rules are she can adjust her business accordingly. But with a lawsuit, how do you plan for that?”
Larger businesses can keep an attorney on retainer and absorb legal costs much easier, where smaller businesses can barely afford any legal representation at all.
Federal rule changes have stopped many class action filings “but there are always new ways that people have figured out how to bring more lawsuits to bear.”
Courts tend to side with the trial lawyers on such matters, he said.
Attorneys have addressed I-LAW’s criticism. In a lengthy letter recently posted on the website of the Illinois Trial Lawyers Association, Stephen D. Phillips, the immediate past president of the group, took on the issue.
“I wish Travis Akin, of the misleadingly named Illinois Lawsuit Abuse Watch, would tell the truth, just once, and admit there is absolutely no correlation between the business climate in Illinois and lawsuits,” Phillips wrote. “Instead, he ‘demonizes’ our civil justice system and spreads false claims that lawsuits are responsible for keeping business away and our unemployment numbers high. Our civil justice system is essential in holding reckless drivers, polluters, careless professionals and negligent companies responsible for the injuries they cause.”
Akin, Phillips said, is little more than a lobbyist for big industry and insurance companies whose goal “is to deny citizens access to the courts that their tax dollars fund.”
The number of civil lawsuits filed in Illinois has steadily declined since 2007, down nearly 25 percent, he said.
“Published statistics show injury lawsuits make up just 6 percent of all civil cases filed in state courts. Indeed, about 70 percent of civil litigation involves businesses suing other businesses or individuals over business disputes,” Phillips said.
Both Akin and Phillips toss out numbers to prove their cases.
Akin cites a survey by Harris Interactive which rated Illinois 46th out 50 states in “legal fairness.” He also said it has been rated the third worst state in which to do business and is third ranked in joblessness.
However, Phillips cites a survey done by Career Builder that shows Illinois third in the nation for net growth in private sector businesses from 2009 to 2012. And the state accounted for 14 percent of all net new establishments in the United States, he said.
Additionally Phillips points to a 2012 survey conducted by the National Federation of Independent Business that ranks lawsuits as 71st among the 75 issues that small businesses find important.
The U.S. Department of Commerce issued a report last month that ranked Illinois 42nd out of the 50 states for economic growth in 2013, the latest year for which statistical evidence is available.