In the wake of intense debate last week, a key Louisiana Senate panel plans to vote on two legal reform measures on Tuesday, including one to mandate the disclosure of third-party litigation-funding contracts.
The Senate Judiciary A Committee is expected to vote on the two legal reform bills, which have already passed Louisiana’s lower house. House Bill 336, sponsored by Rep. Emily Chenevert (R-Baton Rouge), would require that a party or the party’s attorney disclose to all litigants any litigation-financing agreement that promises a third party a share of proceeds from a damages award or settlement.
Another legal reform bill, HB 24 by Rep. Michael Melerine (R-Shreveport), would end the current judicially created presumption of causation of injuries for plaintiffs involved in civil litigation. Specifically, the measure says that a plaintiff’s lack of a history of illness or injury cannot create a presumption that having such a condition was the result of the action that is the subject of a personal injury claim.
Supporters of HB 24 contend that it simply repeals a presumption in a way that will lead to more fairness and predictability in the state’s legal system.
Lana Venable, the executive director of Louisiana Lawsuit Abuse Watch, said that although multiple important issues are before lawmakers this year, legal reforms must not get lost in the legislative shuffle.
“Every single Louisiana resident is paying a hidden ‘tort tax’ of nearly $1,000 directly associated with lawsuit abuse,” Venable told the Louisiana Record in an email. “Further, more than 40,000 jobs were lost last year in Louisiana. Having strong legal reform champions like Reps. Chenevert and Melerine is critical to achieving success this year.”
The Legislature should pass reforms that will benefit all Louisianans, as opposed to measures that benefit the trial bar and bolster the state’s image as a litigious state, she said.
The bills by Chenevert and Melerine are among several that received the backing of the Louisiana Legal Reform Coalition, a coalition of companies, trade associations and others in the state. Other legal reforms being proposed include a bill to disclose what plaintiffs actually pay in medical costs rather than the amount billed to the insurer.
Among those testifying in favor of HB 336 this past week was Lauren Hadden, the Louisiana Association of Business and Industry’s general counsel.
“This bill brings much-needed transparency to Louisiana’s legal system by requiring the disclosure of third-party financing agreements in litigation,” Hadden said on X, formerly Twitter. “These arrangements can obscure potential ethical concerns and conflicts of interest, and funders may stifle negotiations or attempts to settle out of court in hopes of a higher payout.”
The litigation-financing bill, however, does contain some limitations. It would exempt from the disclosure mandate nonprofit legal organizations that seek only injunctive relief on behalf of clients, according to the state Legislature’s analysis of the bill.
“A nonprofit legal organization shall not be required to disclose its donors or sources of funding,” the analysis states.
In the case of class-action lawsuits, the bill provides that “any legal, financial or other relationship between a legal representative and litigation financier” must be disclosed to all parties.
Melerine’s bill on the presumption of causes of injuries would not apply to personal injury claims advanced under the Louisiana Workers’ Compensation Law.