Amid what one analyst called the state's legal climate as “near the bottom,” this year’s legislative session represented a disappointment with missed opportunities.
Lana Venable, executive director of Louisiana Lawsuit Abuse Watch, told the Louisiana Record she based her comments on dismal ratings from a number of outside agencies.
For example, the U.S. Chamber Institute for Legal Reform “ranked Louisiana as having the worst lawsuit climate in the country,” Venable stated via an email interview. She also noted a ranking from the American Tort Reform Foundation as “the nation’s fifth-worst Judicial Hellhole,” as well as a failing grade on the Insurance Regulation Report Card issued by R Street Policy.
“Lawsuit abuse costs in Louisiana are among the highest of any state, with Louisiana taxpayers footing the bill for a hidden 'tort tax' of about $4,000 per household annually,” Venable said.
These abstract ratings are backed up by a tangible, negative impact on Louisiana residents and taxpayers. The “litigious climate” means that if you live in Louisiana, you’ll be paying $841 more annually for auto insurance, ranking the state No. 2 nationally.
“The bottom line is that Louisianans don’t have more accidents or file more property damage claims, but motorists do file nearly double the amount of bodily injury claims compared to the national average,” Venable said. “Not only are consumers impacted, but the multitude of businesses and industries that serve as the backbone of our economy are facing fewer and more expensive options when it comes to insurance.”
Venable said dwindling competition among insurance carriers had reached a “crisis point,” discouraging some businesses from the state.
A bill from state Rep. Kirk Talbot, the Omnibus Premium Reduction Act (H.B. 372), “would have gone a long way in improving Louisiana’s legal climate,” Venable said.
Even with bipartisan House support, H.B. 372 stalled in the state Senate, a “status quo” decision Venable said would prevent any insurance cost relief for residents. It also maintained the $50,000 threshold for jury trials, “a whopping 233 percent higher” than in Maryland, the next highest at $15,000.
“Put simply, this means that civil cases valued at less than $50,000 are tried by judges, not juries,” Venable said. “Perhaps it is no coincidence that more than 50 percent of claims in Louisiana are under this threshold, allowing trial lawyers to pursue favorable venues for their clients. This ‘sue and settle’ practice manipulates the system and increases insurances costs for all of us.”
Venable said voters hold the key to real reform.
“Louisiana voters must hold their elected officials accountable at the ballot box this fall,” she said. “If no action is taken to address lawsuit abuse, the situation will only become worse. Our citizens work hard to provide for their families and it’s time to have their voices heard over those of the entrenched trial bar.”
Editor's note: The Louisiana Record is owned by the U.S. Chamber Institute for Legal Reform.