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The 10 States with the Worst Legal Climates

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By Deanne Katz, Esq. on September 11, 2012 6:47 AM

It's no secret that there are best and worst legal climates for a business to start based on state law. Unless you thought it was a coincidence that credit cards all come from Delaware in which case don't let us interrupt your daydreams.

But for those who are looking for the best and worst places to launch a business, the U.S. Chamber Institute for Legal Reform has some answers. Their survey of business attorneys and business leaders, published Monday, gives some insight into the legal climates of various states.

It's no shock that Delaware is number 1 but when it comes to the worst states, you may be surprised.

The survey asked respondents to rank states based on their treatment of business-relevant lawsuits, reports the Los Angeles Times. They also evaluated the impartiality and fairness of judges and juries among states.

Based on that, they ranked the states in order. Here are the worst:

  1. West Virginia
  2. Louisiana
  3. Mississippi
  4. California
  5. Illinois
  6. Montana
  7. New Mexico
  8. Alabama
  9. Oklahoma
  10. Florida

And now the best:

  1. Delaware
  2. Nebraska
  3. Wyoming
  4. Minnesota
  5. Kansas
  6. Idaho
  7. Virginia
  8. North Dakota
  9. Utah
  10. Iowa

A state's legal climate can be a big factor in choosing where to start or grow a business. The ability to get a fair trial if issues arise is an important consideration.

That is especially true for industries that are heavily regulated by consumer protection laws or that have high risks associated with them.

Lawsuits aren't just bad for your image; they're expensive as well. Be proactive and consult your attorney about your plans to start a business or expand an existing one. They can give you advice on how to avoid lawsuits.

Trial time later almost always costs more than consultation time up front.

Even if your state isn't listed in the top 10 best or worst legal climates, it's still ranked on the list. While the best way to avoid a lawsuit is to make sure your business follows the law, picking a business-friendly state is a close second.

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