LLAW says consumers should be aware that litigation drives up costs

Catherine Melancon Oct. 3, 2012, 8:00am

Melissa Landry

BATON ROUGE - With Louisiana consistently ranked as having one of the worst legal climates in the country, a watchdog organization is encouraging legal reform during "Lawsuit Abuse Awareness Week."

The theme of this year's observation that runs Oct. 1-5 is "create jobs, not lawsuits," according to Melissa Landry, executive director of Louisiana Lawsuit Abuse Watch (LLAW).

"The goal is to urge folks to sign (the) petition and send a message to lawmakers that lawsuit abuse is something that we care about and something we want to see cleaned up here in Louisiana," said Melissa Landry, executive director of LLAW.

According to information provided by Bolt Insurance, which describes itself as "America's business owners' liability team," many small businesses fall victim to frivolous or meritless lawsuits. Bolt says that its research indicates that one in three small business owners were sued or were threatened with a lawsuit in recent years.

One example often pointed to in Louisiana is Monroe & Gasket of Monroe, a small business owner that has faced more than 100 asbestos lawsuits by more than 2,000 plaintiffs.

Landry indicated that after the massive wave of asbestos litigation sent larger asbestos manufacturers into bankruptcy, asbestos exposure sufferers aimed litigation at smaller businesses, such as Carter's business.

Company president Mike Carter asserts that he never manufactured any kind of asbestos products, however, he did sell a sheet containing encapsulated asbestos that his shop purchased that was pre-made by another manufacturer. In testimony Carter gave to the U.S. House Judiciary Subcommittee he said that air tests run in his shop did not detect harmful dust.

"He's been through the majority of those cases now," Landry said.

"There's only I think a dozen or so (cases against Monroe & Gasket) left. Every single one of them has been thrown out on summary judgment. He's never been found guilty of anything, but it has cost him literally millions of dollars in legal defense just to get to the point where he's dismissed."

In addition to asbestos litigation, Landry points to the rising rate of automobile lawsuits that has increased in recent years as another sign of Louisiana's litigious nature.

Landry hopes people will see the correlation between automobile insurance rates and the amount of automobile lawsuits in Louisiana.

The state has the highest automobile insurance rates in the country, which some attribute to the judicial system and jury trial threshold amount in Louisiana.

The jury trial threshold amount corresponds to the amount of damages sought in a case before a jury is granted. Landry said in Louisiana the threshold for a jury trial is $50,000 and above, which is much higher than any other state–the next highest state's threshold is $15,000.

This results in more cases being settled at the discretion of a judge alone rather than in front of a jury.

"You do have situations where you have plaintiffs and attorneys who go around shopping for friendly judges," Landry said. "It basically forces a lot of settlements because the insurance companies don't want to take their chances before a judge."

When asked what was being done to attorneys and law firms who represent the plaintiffs who could be abusing the judicial system, Landry said basically nothing.

Landry said although there is a law in Louisiana that allows judges to sanction attorneys who file frivolous suits, she has never seen it utilized by judges to help minimize and reduce potentially frivolous or merit-less cases.

"I think part of it is that there's this notion that it's all part of the process that if it gets thrown out or dismissed, no harm, no foul i'ts done," she said. "That may be the case for the judge or the case for the plaintiff, but for the defendant who spent thousands, or in some cases millions of dollars to defend themselves or their business, a lot of harm has been done. That's not to mention the time."

According to Bolt Insurance, tort liability has cost U.S. small businesses approximately $105.4 billion.

Landry's group is taking notes from legal reform in Texas. Texas has passed medical malpractice reform, asbestos reform and more recently the Losers Pay Law, which was passed in 2011.

"What the Loser Pays Law is designed to do is if the case is ruled by a judge to be merit-less or frivolous, the person who is found to be at fault for the case, they actually pay for the cost of legal defense," Landry said.

LLAW is active through social media, such as Facebook and Twitter. Landry also said there is a petition citizens can sign on its website.

It also urges followers to send messages to local lawmakers concerning lawsuit abuse. Landry said her group hopes the awareness week will help reveal the connection between the high numbers of lawsuits and the effect it has on the state's consumers.

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