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Lawsuit Abuse Reform Measure is Promising

One of several newspaper ads that ran supporting tort reform.

To paraphrase essayist Charles Dudley Warner, “Everybody complains about the high automobile insurance rates in Louisiana, but nobody does anything about it.” Well, it was not for lack of trying.

By Jim Simon
Manager, American Sugar Cane League

As you know, it’s hard to get a group of people to agree on any particular measure, including efforts to reduce lawsuit abuse. What everyone did agree on is Louisiana has high auto insurance rates. Louisiana drivers pay the second-highest auto insurance premiums in the country after Michigan. Many legislators believed that existing laws made it too easy for plaintiffs to sue and claim damages after a car accident. Business owners, especially those with large driving fleets, believed they were too often unfairly targeted by plaintiffs wanting a quick cash settlement.

The sugarcane industry, along with other commodity groups, are supportive of tort reform and our support went a long way in the state capital in 2020. We also worked very closely with the Louisiana Farm Bureau Federation and the Louisiana Association of Business and Industry.

At the very end of the recent special legislative session, the state house and senate, succeeded in passing House Bill 57, known as the Civil Justice Reform Act of 2020. Governor John Bel Edwards said he would sign it. The measure lacks some of the strong reform provisions that we were pushing for, but it is a good step in the right direction.

What does H.B. 57 do? It lowers Louisiana’s threshold for jury trials from $50,000 to $10,000. That should help create a climate to reduce frivolous claims. It should also make the playing field a bit fairer and reduce exposure. The bill also repealed the seat belt gag order which prohibited a jury from know if the claimant was wearing a seatbelt during an accident. Also, settlements for medical damages will be closer to what the plaintiff actually paid rather than the inflated billed amount.

Will the measure work? The consensus is it will reduce rates for the average driver. Currently, there are not a lot of insurance companies writing policies for commercial business in the state so there is very little competition. Ultimately, we hope the tort reform measure improves Louisiana’s legal climate which will make the insurance market better. A better market will attract more insurance companies to set up shop in the state. The sugarcane industry believes it is a step in the right direction, but we will keep working with the legislature and the governor to improve the insurance climate.

 

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