(The Center Square) − Louisiana’s civil court system is dragging down the state’s economy and costing thousands of jobs, according to a study from the Perryman Group and Citizens Against Lawsuit Abuse.
The data found that excessive civil litigation in Louisiana comes with a hefty price tag: Nearly 40,000 jobs lost, more than $2.9 billion in lost personal income and more than $240 million in annual state government revenue losses. The economic impact ripples across all sectors, from construction and agriculture to retail and finance.
“Louisiana families and businesses are footing the bill for an unbalanced legal system,” said Lana Venable, executive director of Louisiana Lawsuit Abuse Watch. “We simply can’t afford to stand by and continue to allow lawsuit abuse to negatively impact our residents, job creators and overall economy.”
The study estimates the cost of litigation translates to a so-called “tort tax” of more than $1,000 per Louisiana resident annually — and over $2,000 per person in the greater New Orleans area.
In New Orleans alone, excessive tort costs are estimated to wipe out $1.6 billion in personal income and nearly 22,000 jobs each year. The Baton Rouge metro area also sees significant losses, with almost 7,800 jobs cut and $570 million in personal income disappearing annually due to civil court costs.
“This domino effect will impede opportunity for our residents and businesses, while they continue to absorb the rising costs of goods and services,” Venable said, pointing to states like Texas, Florida, and Georgia as examples of how tort reform can improve a state’s business climate.
The report warns that Louisiana’s civil justice environment is not only deterring investment but also placing everyday goods and services out of reach for many consumers.
It cites a 2019 survey in which nearly 90% of corporate attorneys said a state’s litigation environment directly influences business decisions—a jump from 75% in 2015.
By industry, the losses are staggering. Louisiana’s manufacturing sector alone has seen more than $1.4 billion in gross expenditure losses, while retail trade took a $1.1 billion hit. Business services and financial activities were similarly impacted, each losing over $1 billion.
Nationally, excessive tort costs are estimated to drain $558 billion in output from the U.S. economy and eliminate nearly 5 million jobs. Louisiana’s share of those losses is among the highest per capita in the country.
The report calls for comprehensive civil justice reforms, including limits on non-economic damages and stronger standards for filing lawsuits.
According to The Perryman Group, such measures have led to “substantial economic benefits” in states that enacted them, including improved judicial efficiency, higher productivity, and stronger job markets.
“If Louisiana doesn’t follow suit,” said Venable, “we will continue to fall behind.”