Center for America

News Releases About Legal Reform

October 12, 2006

 

Survey Shows Legal Climate Hurting

Iowa's Job Growth

For Immediate Release

 Contact:
Kristyn Shayon

404-228-3261

October 12, 2006 – 82% of Iowa's business leaders responding to a recent survey said that the legal climate in Iowa imposes costs on businesses that hurt job growth.

 

The survey, conducted by The Iowa Association of Business and Industry with assistance from the Center for America in July 2006, invited Iowa business leaders and owners to anonymously complete an internet-based questionnaire.  The results show how the out-of-control legal environment is increasing costs to consumers and impeding economic growth and innovation.

  • Four out of five, 80%, say that the legal climate in Iowa increases the cost of everything consumers buy in Iowa.

  • Nearly four out of ten, 39%, have decided against developing new products and/or services in order to avoid liability lawsuits.

  • More than seven out of ten business leaders responding, 73%, say that they now spend more time than ever before trying to manage the risks of being sued.

  • Nearly seven out of ten, 69%, say that the legal climate in Iowa creates disadvantages for businesses in Iowa compared with other states.

  • More than half, 55%, say that the legal climate in Iowa discourages them from spending to create or improve products and/or services.

“Increasing costs due to litigation and fear of litigation have clearly impacted the attitudes of job creators in Iowa,” said John Gilliland, Senior Vice President of the Iowa Association of Business and Industry (ABI). “We hope this Iowa specific data will help policy makers understand the need for continued reforms to Iowa’s legal climate.”

 

The survey reveals how the legal climate in Iowa impacts the state’s economy and how business investors view the effect of the legal climate on their companies. Despite a top 25 ranking in the Pacific Research Institute's recently released US Tort Liability Index, Iowa business owners still feel threatened by lawsuits and are spending a great deal of time and money protecting their businesses from them.

 

"Lawsuit abuse is undermining Iowa business plain and simple," said Dan Pero, President of the Center for America. "A climate of litigation depresses wages, curtails job growth and hurts the pocketbooks of every Iowa family and job provider. Iowa has so many benefits that make it an attractive home for prospective and current employers, particularly small business. Unfortunately, too many lawsuits can make a state like Iowa uncompetitive in the race for jobs. In fact, many small business owners are just one lawsuit away from bankruptcy which would have a devastating impact on communities across the state. Iowa is fighting for its economic livelihood and that fight cannot be lost because too many trial lawyers are more concerned about what's in their wallet than what they take from the wallets and pocketbooks of hard working Iowans."

 

One third of the business owners and managers participating in this survey, 33%, have 49 or fewer employees. Another 20% have 50 to 99 employees and 33% have 100 to 499 employees. Leaders representing businesses with 500 or more employees comprise 14% of the respondents. Thus, the survey respondents reflect the group of small and medium size businesses that traditionally generate the greatest share of new jobs and fuel local economic growth.

Listen to an audio interview with ABI's John Gilliland

Download Full Survey Report

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The Center for America mission is to educate, motivate and empower the public to support state liability reforms to end lawsuit abuse.

Contact:

Kristyn Shayon

Director

Communications Services

Center for America

404-228-3261

CFA@lawexec.com

 

 
     
 

 

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