After a year of successes and some setbacks, advocates of tort reform in Louisiana are observing Lawsuit Abuse Awareness Week to inform the public about the economic consequences and household costs of excessive litigation statewide.
Louisiana Lawsuit Abuse Watch (LLAW) and the Louisiana Legal Reform Coalition are among the civil justice reform groups nationwide that are advocating for more transparency and accountability in the civil justice system – and to warn of the consequences of “jackpot justice,” which provides large damages awards for some plaintiffs at a significant economic cost to the overall state economy, according to reform advocates.
“Transparency is critical in establishing and maintaining a civil justice system that serves all Louisianans, while leveling the playing field for businesses of all types and sizes,” LLAW executive director Lana Venable said in a statement emailed to the Louisiana Record. “Hardworking families and job creators continue to pay the price when our system is not working as efficiently as it should, reflected in the availability and affordability of everyday goods and services.”
During the past legislative session, state lawmakers passed and Gov. Jeff Landry signed a bill placing limitations on what’s called third-party litigation funding (TPLF), which critics say allows financiers with no interest in the outcome of litigation to finance plaintiffs’ lawsuits in order to get a share of potentially large damages awards. The new law will make TPLF agreements subject to discovery during civil court proceedings and also require that foreign-based funders disclose their actions to the state attorney general.
But another key bill favored by reformers, HB 423 by Rep. Michael Melerine (R-Shreveport), was vetoed by Landry in June. The bill, which received bipartisan support in the state Legislature, would have given civil juries access to information on the actual medical billing amount paid to plaintiffs by insurance companies in personal-injury cases. Reform advocates have said that under current law, juries only know the stated “sticker price” for certain procedures rather than negotiated amounts – a situation that can inflate jury awards.
“Some progress was made during the regular legislative session including repeal of the direct-action statute and third-party litigation funding disclosure by both domestic and foreign interests,” reform coalition executive director Karen Eddlemon said. “However, important legislation that would have allowed juries to see both the amount billed to a health care provider as well as the amount actually paid by insurance in injury cases was vetoed. We will continue to fight for these and other reforms to bring necessary transparency to our civil justice system.”
The bill amending the direction-action statute puts limitations on when plaintiffs can advance a lawsuit against a defendant’s insurer. The measure, which was signed by Landry, took effect on Aug. 1.
Tort-reform advocates point out that the American Tort Reform Foundation, which originated Lawsuit Abuse Awareness Week (Oct. 7-11 in 2024), ranked Louisiana the seventh worst “Judicial Hellhole” in the nation in its 2023-2024 report.
Earlier this year, the LLAW released economic data compiled by The Perryman Group that showed excessive civil litigation costs Louisiana nearly $4.5 billion in gross product losses, more than 40,500 jobs and reduced revenues to state and local governments of about $422 million annually. The annual “tort tax” for Louisiana residents is estimated at nearly $1,000.
The high cost of property insurance in the state and recent decisions by insurers to limit coverage or leave Louisiana’s insurance market altogether have been blamed in part on excessive civil litigation, but reform advocates say lawsuit abuse has impacts that go beyond a single issue.
“A fair and balanced civil justice system is good public policy, leading to a more stable, predictable business environment and further aligning Louisiana with other states,” reform advocates said in a statement.