The Business Community Wants Tort Reform In This Session

LABI put out a press release this morning in support of tort reform at this year’s legislative session, which isn’t a major surprise.

What is more notable is how big a coalition they’ve put together in pursuit of a tort reform push…

Forty chambers of commerce and industry organizations are working together to reform Louisiana’s lawsuit climate.

Who Are Our Partners?

Louisiana Association of Business and Industry
Associated Builders and Contractors of Louisiana
Baton Rouge Area Chamber
Blueprint Louisiana
Bossier Chamber of Commerce
The Business Council of New Orleans and the River Region
The Central Louisiana Chamber of Commerce
The Chamber Southwest Louisiana
Committee of 100
Coalition for Common Sense
The Greater Lafayette Chamber of Commerce
The Greater Shreveport Chamber of Commerce
Houma-Terrebonne Chamber of Commerce
Independent Insurance Agents & Brokers of Louisiana
The Lafourche Chamber of Commerce
LCTA Workers’ Comp
Louisiana Ammonia Producers
Louisiana Asphalt Pavement Association
Louisiana Chemical Association
Louisiana Chemical Industry Alliance
Louisiana Industrial Development Executives Association
Louisiana Lawsuit Abuse Watch
Louisiana Mid-Continent Oil and Gas Association
Louisiana Motor Transport Association
Louisiana Oil and Gas Association
Louisiana Pulp and Paper Association
Louisiana Railroads Association
Louisiana Restaurant Association
Louisiana Retailers Association
Minden-South Webster Chamber of Commerce
Monroe Chamber of Commerce
Natchitoches Area Chamber of Commerce
National Federation of Independent Business – Louisiana
Pelican Institute for Public Policy
Pharmaceutical Research and Manufacturers of America
Property Casualty Insurers Association of America
Republican Party of Louisiana
River Region Chamber of Commerce
Society of Louisiana Certified Public Accountants
The West Baton Rouge Chamber of Commerce

Why?
America maintains the most expensive tort system in the world to the tune of $865 billion every year, yet studies show victims receive less than 15-cents of every dollar.  Within this broken system, Louisiana ranks #7 nationwide on the Tort Activity Index, #49 for our lawsuit climate, and #2 on the Judicial Hellholes list.

Excessive litigation affects the economy in numerous ways, but first and foremost, by increasing the cost of doing business.  Companies large and small have no choice but to share these costs with the consumer, whether through higher insurance premiums or direct costs of goods and services.  This “tort tax” of unnecessary costs and waste is estimated at $9,827 annually for a family of four.  Ultimately, society as a whole feels the effect of excessive lawsuits, a silent weapon against job creation and economic growth.  The poor legal climate in Louisiana costs as many as 50,000 new jobs every year, and changes to our system could result in $1.1 billion in savings for Louisianans.

An efficient and fair civil justice system is necessary to incentivize safe products and services and to provide justice to victims when wrongdoing occurs.  But Louisianans recognize that is not what is in place today.  Although more than eight out of 10 Louisiana voters believe lawsuit reform is needed, policymakers have not done enough to recognize and fight the costs of excessive litigation and a poor legal climate.

What?
The vast majority of tort lawsuits are filed in state courts, and the laws regulating this system can be changed by state legislatures.  The Louisiana regular legislative session convened March 10, 2014, and our organizations and companies have come together to support measures to improve Louisiana’s legal system that incorporate the following principles:

  1. Limit the number of frivolous lawsuits filed in Louisiana, preserving a fair and efficient system for real claims and real victims.
  2. Reduce the “tort tax” on every-day Louisianans, conserving resources for more important priorities for families, businesses, and the economy.
  3. Inject transparency and fairness into a closed process, and hold our public entities accountable for decisions that add to the lawsuit climate in Louisiana.
  4. Increase citizen access and input into the legal system.

Who?
These partners, organizations, and companies have come together to urge the Louisiana Legislature and the Governor to take action this session to improve Louisiana’s lawsuit climate.

What else is notable about the press release – there isn’t a list of specific bills on tort reform that the coalition backs.

That’s OK, though – our buddy Melissa Landry from Louisiana Lawsuit Abuse Watch, which is a member of the coalition, sent along a summary of the tort reform bills up for debate in this session – some of which will begin moving in committees in the next week or so…

HB 917 & SB 273 –Improving Access to Louisiana Courts

Most Louisiana citizens believe they have an automatic right to a trial before a jury of their peers. That is correct in criminal cases, but not in all civil lawsuits.  Because of a unique law in Louisiana which dictates that civil claims under $50,000 must be decided by a judge, not a jury, many citizens are being denied their fundamental right to a trial before a jury.

LLAW’s analysis of civil jury trial threshold limits for all 50 states found that the vast majority of states have no threshold for civil jury trials, and among the 14 states that do, Louisiana’s threshold is, by far, the highest in the nation. At $50,000, Louisiana’s jury trial threshold is roughly more than 28 times the national average of $1,742.40.

The practical impact of this has been to significantly reduce the number of civil jury trials held in the state and minimize important citizen involvement in the civil justice system.   Some experts also say that Louisiana’s excessive $50,000 threshold may also have some impact on automobile insurance rates, which on average are the highest in the country.  Several bills have been introduced to reduce the state’s jury trial threshold, which would allow more citizens to participate in the judicial process and could help to lower auto premiums for drivers.  Read more at http://theadvocate.com/home/8402928-125/story.html.

HB 482- Curbing Fraud & Abuse in Asbestos Litigation

Too often, meritless lawsuits threaten the survival of small businesses in Louisiana. One of the most egregious examples of this is asbestos litigation. After more than 40 years, asbestos litigation is now the longest-running mass tort in U.S. history, and it is clear that the billions of dollars involved in this sector of litigation have attracted a large number of questionable claimants.  As this litigation has expanded and evolved, some states, including Louisiana, have struggled to pass reforms that can help prevent fraud and abuse and ensure that all real victims are properly compensated.

For example, Louisiana plaintiffs involved in asbestos, silica, or other latent disease exposure cases are currently able to file suit in any jurisdiction in the state. Unfortunately, this encourages a culture of venue “shopping” where some contingency fee attorneys, who make their money directly based on the size of verdicts or settlements, seek out judges and courts where there is an established track record of ruling in favor of plaintiffs. This can deplete judicial resources and lead to overcrowding in some jurisdictions.

To address this problem, a number of bills have been introduced this session to establish proper venue in exposure cases. By passing this common sense reform measure, we can eliminate abuses in asbestos litigation and ensure that those who are truly impaired can quickly and efficiently have their day in court.  Learn more at http://www.youtube.com/watch?v=0_YUjGu9HXo.

HB 799-Bringing Transparency and Accountability to the Attorney General’s Office

The use of private contingency fee lawyers by the state Attorney General’s Office has increased significantly in recent years, in spite of a ruling from the Louisiana Supreme Court which clearly states that the Attorney General has no authority to engage contingency-fee lawyers on the state’s behalf:  “under the separation of powers doctrine, unless the attorney general has been expressly granted the power in the constitution to pay outside counsel contingency fees from state funds, or the legislature has enacted such a statute, then he has no such power.” (Meredith v. Ieyoub.)

Perhaps even more troubling than this apparent violation of the spirit, if not the letter of the law, is that numerous investigations and public records requests have revealed many of the privately contracted attorneys representing the Attorney General are political contributors who were selected without the benefit of an open public-bid process.

Recognizing this as a problem, lawmakers have filed numerous bills to increase transparency in the process by which the state’s attorney general awards or allows outside legal counsel contracts.  Learn more at http://www.wwltv.com/news/eyewitness/davidhammer/Attorney-General-called-out-208249341.html.

HB 925 & SB 414- Regulating Consumer Lawsuit Lending

Consumer lawsuit loan companies prey on vulnerable people when they are at their weakest – such as someone injured in an accident and struggling to pay medical bills.  They promise consumers access to quick cash, but because out-of-state lenders are currently unregulated in Louisiana they are allowed to charge consumers hidden fees and sky-high interest rates that can reach as much as 150 percent annually. To put that number in perspective, the average annual percentage rate on a credit card is 13.3 percent.

These loans hurt consumers, encourage unnecessary lawsuits, increase litigation costs, and allow lenders to leverage the taxpayer-funded judicial system for financial gain.

That’s wrong.  That’s why LLAW is supporting legislation to regulate the lawsuit lending industry under Louisiana’s usury laws and apply the same limits on interest rates to out-of-state companies that may be charged by companies located in Louisiana.  Several bills have been filed that will achieve this goal.  Read more at http://nbclatino.com/2013/10/07/opinion-lawsuit-funders-offer-empty-promise-in-predatory-lending/.

It’s actually not as ambitious an agenda as some would hope for, frankly – for example, we’d like to see a “loser pays” bill introduced in Louisiana, and we’d also like to see a move toward appointed judges rather than elected judges since what appears obvious is that elected judges are bought and paid for by the lawyers who practice in front of them. An effort to make it a whole lot harder to get into law school in Louisiana, which might even shut down Southern’s law school, would reduce the number of lawyers we have in this state and therefore the number of stupid lawsuits the lesser of the breed would file, would be another positive step we’d like to see.

But this list contains a lot of legislation which is doable without a major fight, and it’s an agenda containing some likely wins. It will be interesting to see if the tort reformers are able to bank some of them and build momentum for more substantive changes later.

But it’s a start, and

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