As I wrote about earlier this month, there are few issues more pressing in Louisiana than the need for tort reform. The state of insurance in Louisiana could not be worse, with rates far higher than practically anywhere else in the nation and companies fleeing the state because of it.
During the 2019 legislative session, there was a pretty big bill by Rep. Kirk Talbot that sought to eliminate several problems and advance tort reform in Louisiana. The bill, known as the Omnibus Premium Reduction Act of 2019, ultimately could not pass through a Senate run by John Alario and committees rigged with trial lawyers ready to shoot down any possibility of reform on this front.
While Talbot’s ideas were good, the Senate being rigged against the bill was not the only issue it faced. Omnibus bills (legislation that is crammed full of ideas people want to see passed all at once) are terrible vehicles for reform, as reform in many cases comes down to negotiation (read: pleasing all sides enough while also managing to get something done). Talbot’s bill was an all-or-nothing shot at reform, and one part being unacceptable meant that everything was tossed out.
However, many of the reforms Talbot sought can be put forward in their own bills and each discussed, negotiated, and eventually passed and put onto the governor’s desk.
The first item that should be passed is a bill to appropriate the money to hire independent actuaries to study the numbers and determine what rates could be in Louisiana. Not rates as determined by the insurance companies’ actuaries, but determined by independent ones who have no ties to either the trial lawyers or the insurance companies. That way, you have truly fair estimates. Maybe their numbers won’t be that far off from what the insurance companies say they are, but if there is any chance to give the consumers (AKA the constituents who put the legislators in office in the first place) a possible rate reduction, isn’t it worth the effort?
After that bill would be a series of bills aimed at addressing the legal side of our insurance quagmire. At the top of the list is the civil jury trial threshold, which is currently $50,000 in Louisiana – the highest in the nation and $35,000 higher than the second-highest threshold (Maryland). Currently, well over half of the country has no jury trial threshold whatsoever, making Louisiana almost as far out of step with the country as it could get. Basically, this is a legal rule that allows a judge, not a jury, to rule on a case if the damages are set at $49,999 or lower. If Louisiana were to drop that even to Maryland’s level, it would end a lot of lawsuits making insurance rates so problematic in the first place.
The next bill is a compromise bill aimed at easing the trial lawyers in the state by extending Louisiana’s prescription period (meaning the time you have to file a lawsuit in the first place). Currently, we have a one-year prescription, and not too long ago many trial lawyers in the state called for extending it.
The next two bills involve the evidence that defendants should be allowed to bring up at trial. The first is Sen. Sharon Hewitt’s bill from this past legislative session allowing defendants to introduce into evidence the fact that a plaintiff was not wearing a seatbelt at the time of the accident. As strange as it sounds, that is currently not allowed in our legal system, but it would have a major impact on the awarded damages if it turns out some (or all) of the injuries received in a crash came from a plaintiff not wearing their seatbelt… and decreased damages paid out means a decrease in how much you end up paying your insurance company in surcharges/rate increases.
Couple with that a bill to end the collateral source rule, meaning that judges and juries would be allowed to hear what health insurance has already paid out to a plaintiff. Current law only allows for them to know the “sticker price” for medical bills, which may or may not be in line with what the plaintiff actually received, and they could end up getting paid far more than the actual damage they received in the initial accident.
The last tort reform bill the legislature should definitely put forward in the 2020 session is a bill to end direct action against insurers. Under the current system, plaintiffs can file a lawsuit against a defendant and their insurer. Because such a large company is involved, often times that has the psychological effect of convincing juries that more in damages can be awarded, regardless of whether or not they should be awarded. This direct action culture plays a huge role in chasing insurance companies out of the state altogether.
If the Republican-dominated House and Senate are serious about introducing major reforms for the state, then tort reform should be at the top of the list. And while these ideas are not new and have been discussed to death before, they are still the most important (and most effective) ways we can begin to fix one of the biggest problems our state faces.