A compromise tort-reform bill sitting on Louisiana Gov. John Bel Edwards’ desk will lift some of the financial burdens that lawsuit abuse places on households and encourage businesses to expand job offerings.
That’s how Daniel Erspamer, CEO of the Pelican Institute for Public Policy, sees things playing out once Edwards signs House Bill 57, the reform bill authored by House Speaker Clay Schexnayder (R-Gonzales) that won wide bipartisan support in the state legislature. The Governor’s Office has indicated that Edwards would sign it.
“As the incentive for frivolous lawsuits continues to decline, we’ll see fewer of them, and that certainly makes its way back to the pocketbooks of Louisianans,” Erspamer told the Louisiana Record.
HB 57 aims to encourage more reasonable legal settlements by lowering the monetary threshold needed for a civil jury trial from the current $50,000 to $10,000; by ending the state ban on allowing jurors to hear evidence about plaintiffs’ use of seat belts in auto insurance lawsuits; and by defining medical damages as the amount actually paid to the injured party, rather than an insurer’s “sticker price.”
“I think it’s important to note that this is a really good first step, but there’s still a lot of work to be done,” Erspamer said. “We believe what passed this session will absolutely have an impact in a variety of ways, but it’s certainly not everything in terms of legal reform, at least from our perspective, that is important to do to really drive down the negative impact of an abusive legal system here in Louisiana.”
Some good news for Louisiana auto insurance policyholders has already occurred amid the debates over tort reform, he said. Louisiana Insurance Commissioner Jim Donelon just approved a permanent rate reduction of 9.6 percent for State Farm auto insurance in the current coronavirus period, when people are driving less. State Farm auto rates have dropped 23 percent over the past two years, Donelon’s office reported.
The legal climate has a huge impact on jobs, Erspamer said, since the threat of abusive lawsuits creates uncertainty for businesses.
“Part of the challenge in the state is that the lawsuit climate makes it very unpredictable,” he said. “You can’t plan.”
Though Erspamer expects HB 57 to help create a more predictable legal climate, the legislature has yet to address some other key legal issues, he said. Among them is the impact of coastal erosion lawsuits filed against energy companies by several parishes – a development that the Pelican Institute sees as driving energy jobs out of state and costing the state economy millions of dollars annually.
Even so, Erspamer views the latest tort-reform proposal as an important step to defeating special interests.
“It’s past time to get Louisiana working, and HB 57 will help make our state a place that creates and encourages, rather than chases away, jobs and opportunity for all its citizens,” he said.