Freedom Foundation Releases New Report: The Lawsuit Reform That Minnesota Needs Now

The Freedom Foundation of Minnesota released a new report Wednesday on how long-overdue lawsuit reform can attract and retain businesses, promote job creation, and improve our state’s economic competitiveness. The report, entitled "The Lawsuit Reform that Minnesota Needs Now", also demonstrates the deleterious effects of Minnesota’s current system of torts, which is outdated, needlessly expensive, and fundamentally imbalanced. Annette Meeks, CEO of the Freedom Foundation of Minnesota, announced the release of the foundation’s report Wednesday morning.

"Unfortunately, the proliferation of lawsuits has shown that America’s tort liability system is excessively costly and inefficient. The latest estimates put annual direct costs at $264.6 billion, or $857 per capita. The data clearly suggest reform is needed to sustain and encourage a healthy economy," said Meeks.

"Minnesota’s system of torts is imbalanced, unfair, inefficient, and needlessly expensive. This outdated system is bad for Minnesota residents and businesses. Our system is currently among the least fair and least efficient in the nation, making Minnesota one of the most attractive states for lawyers and lawsuits," stated Meeks.

"If we are serious about state government creating an environment that encourages job growth and sustains a successful economic recovery, then lawsuit reform needs to be at the top of the list. If Minnesota enacted just a fraction of the reforms outlined in this report, it would encourage employers to create at least 26,000 new jobs in our state," said Meeks.

Proposed Lawsuit Reforms

Class Action Rules – Curb the use of class action suits as a vehicle for lawsuit abuse by making stronger rules for class certification

Attorney’s Fees – Curb attorney fees in contingency cases by requiring they be reasonable

Venue – Prevent or discourage lawyers from shopping for a friendly venue in which to file their suit

Scientific Review – Adopt a stronger standard for admission of evidence

Statute of Limitations – Adopt a four-year instead of six-year limitation for negligence-based claims. Minnesota is one of only three states with this outdated and lengthy statute of limitations

Benefits of Lawsuit Reform

Reduction in Tort System Costs – Enacting tort reform could result in a lowering of insurance losses by 47 percent, which could mean a reduction in annual insurance premiums by 16 percent

Improved Economic Performance – GDP grew 25 percent faster in the states with the ten best tort systems compared to the states with the ten lowest ranked tort systems. Further, states with the worst system of torts have higher out-migration rates than those that do not.

Increased employment – Data and history demonstrate that fair and efficient tort systems help attract and retain businesses while creating jobs

"Efforts to rein in excess costs and reform our tort system would make Minnesota more competitive for business and less expensive for consumers. This is something real and tangible that state government can do right now to help Minnesota’s economy," said Meeks.

Read the full report

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Contact: Jonathan Blake 612-770-2834

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