Good news for Atlantic County - it's no longer listed as a "judicial hellhole" in a report from the American Tort Reform Foundation. However, experts say New Jersey's legal system still has a lot of work to do to reach perfection.

A study prepared for the New Jersey Lawsuit Reform Alliance(NJLRA) finds 40 percent of south Jersey businesses say they were threatened with litigation in the past five years. A quarter of south Jersey businesses were actually sued during that period.

"New Jersey law, in a few key areas, does encourage litigation abuse," says Marcus Rayner, NJLRA Executive Director. "Our laws, in some cases, are out of alignment with states around us, and they can be abused."

He says the state does have a very good courts system, one that is not biased against defendants or businesses, but it has a hard time getting rid of cases that should not be in the court system to begin with.

"What our laws need to do is make it clear which cases belong in litigation and which do not," says Rayner.

He says litigation costs eventually get passed on to the consumer, through higher-priced services and goods.

Rayner and his group are pushing for reforms in the state's legal system.

"In this economy, we want to make sure everything we do as a state encourages job creation, and what we like to talk about is the fact that legal reform is a no-cost way that the state government can encourage job creation in New Jersey," explains Rayner.

This time around, Atlantic County's court system was upgraded to the watch list for suspicious or negative developments in litigation and history of abuse. It had been considered a judicial hellhole for several years - an area that developed reputation for uneven justice.

New Jersey has the highest tort liability per capita in the country, most likely due to the state's high cost of living.