Excessive civil court costs in Louisiana produce an economic drag on the state equivalent to nearly $413 per taxpayer, according to a study released today by tort reform proponents.
Louisiana Lawsuit Abuse Watch (LLAW) reported that the study by the Texas-based Perryman Group puts the total annual costs of exorbitant civil litigation in the state at $1.9 billion, based on losses in economic output.
The increase in the amount and number of damages awards created by an unbalanced civil justice system leads to higher insurance premiums, fewer innovative products to benefit consumers, higher health care costs and fewer medical services, according to the analysis, which was spearheaded by Citizens Against Lawsuit Abuse (CALA).
“These findings clearly show that civil justice reform must be a priority in Louisiana,” LLAW Executive Director Lana Venable said in a prepared statement. “Frivolous lawsuits and exorbitant plaintiff awards impact all sectors of the economy.”
Excessive legal costs affect all major industries, but retail sales, health services, business services and health care services bear much of the costs, the study states.
The toll from civil litigation excesses includes 19,800 lost jobs per year, which translates into $1.2 billion in individual income. Other fallout from the legal system include annual losses of more than $100 million in state revenues and $84 million to local governments, the study says.
“A healthy legal system should ensure fairness for both truly impaired individuals and small and large businesses operating in Louisiana,” Karen Eddlemon, executive director of the Louisiana Coalition for Common Sense, said in a prepared statement. “Imbalances in the system lead to unpredictability for consumers and businesses, costing jobs and resulting in constrained economic growth.”
Tort reform measures can come in a number of forms, such as restricting damages amounts that can be awarded in medical malpractices claims and other kinds of lawsuits.