Louisiana ranks dead last in people’s ability to get ahead and achieve their version of the American dream, a new report concludes, and a big part of the reason is a low-quality legal system embedded with corruption.
The report titled “Building on Momentum: Louisiana’s Path to Mobility” was published on March 31 by the Washington-based Archbridge Institute and the Pelican Institute for Public Policy in New Orleans. It found that Louisiana ranks 50th in social mobility based on the metrics of economic growth, entrepreneurship, the rule of law, educational opportunities and social capital.
The study concludes that in the category of institutions and rule of law, the Pelican State has suffered from perceptions of corruption that rival those in all the other states.
“It will surprise no one in the state that Louisiana fails miserably on legal systems and rule of law,” the report states. “Louisiana ranked last in this area according to the index. Most Gulf South states also scored low, but last is last.”
The study points to the U.S. Chamber of Commerce’s Institute for Legal Reform (ILR) ranking of the state’s legal system as the second-worst in the country. New Orleans has one of the least-fair legal systems in the United States, and judicial competence and the impartiality of trial judges adds to the perceived lack of quality in the court system, according to the report.
The ILR owns the Record.
“This low ranking is in part driven by Louisiana’s poor tort system, where total cost per capita is over $4,000, or 3% of the state’s (gross domestic product),” the study says. “In Louisiana, this is largely driven by automotive and general/commercial litigation. This can help explain the seemingly ever-growing cost of home and auto insurance in the state.”
But Erin Bendily, the Pelican Institute’s senior vice president, said the story is not all bad and the state does have some momentum to move forward in a positive direction.
“We're doing things to make life better for the people of our state, pursuing proven solutions to defeat protectionism and corruption and bring back jobs and opportunity,” Bendily told the Louisiana Record in an email. “That includes legal reform and tackling lawsuit abuse, looking to states like Florida that have recently implemented reforms that have stabilized their insurance industry, driven down claims-related litigation and lowered premiums.”
The report also stresses the need for the state to move forward on additional legal reforms.
“One major starting point for reform can be in Louisiana’s unique pure comparative negligence law,” the study states. “It provides an avenue for someone to recoup damages even when they were largely at fault.”
Specifically, the law allows a plaintiff who is suing a party for $1 million but is found to be 99% at fault to still collect 1%, or $10,000, for bringing the action, the report adds.
“This incentivizes frivolous lawsuits that drive up expenses, benefiting personal injury lawyers,” the study says. “Most other states do not allow plaintiffs to receive anything if they are deemed to be more than 50% or 51% at fault.”
Louisiana should also consider placing a cap on attorney contingency fees as a disincentive to filing frivolous lawsuits and tightening the criteria for what’s considered “bad faith” or intentional dishonesty in transactions, according to the report.
“Implementing such a cap, combined with tightening laws on fraudulent claims, could help mitigate the sheer number of cases that are brought forward and make space in the justice system for legitimate cases,” the study says.