The Republican controlled Louisiana legislature – which consists of new leadership in the House and Senate – boldly took on the special interests who have been abusing Louisiana’s corrupt legal system and harming the economy for far too long.
If signed into law by Governor John Bel Edwards, House Speaker Clay Schexnayder’s House Bill 57, the Civil Justice Reform Act of 2020, will bring some much-needed legal reforms to the Pelican State that will ultimately result in lower costs for the hardworking people of Louisiana.
“Citizens of Louisiana feel the cost of government in three ways: The burden of taxes, the cost of regulations, and the hidden costs of tort law abuse,” explained Grover Norquist, president of Americans for Tax Reform. “These three things make everything in Louisiana more expensive than in other states.”
According to the R Street Institute’s 2019 Insurance Regulation Report Card, Louisiana has one of the most concentrated auto markets in the nation, which could “be an indication of unnecessarily high barriers to entry or other market dysfunction.” The lack of competition in a concentrated market prevents market forces from driving prices down and results in fewer options being available to consumers. This is likely one of the reasons Louisiana has the second highest auto premiums in the country, behind only Michigan.
Louisiana’s corrupt legal system – which results in insurance companies facing higher costs – has definitely created a barrier to entry or “market dysfunction.” For example, the threshold necessary to receive a civil jury trial in Louisiana is $50,000! For context, the state with the second highest monetary standard is Maryland, at $15,000.
Fortunately, if enacted, HB 57 would address this problem by lowering the threshold for a jury trial to $10,000. While it could be lower still, this reform is a tremendous improvement that would put Louisiana more in line with other states and ensure due process is available for all Louisianans.
Another reform included in HB 57 is the repeal of the seatbelt gag rule. The seat belt gag rule, enacted in the 1980s, prevents juries from knowing if persons injured in an auto accident were wearing seat belts. Repealing this law will help bodily harm awards remain more in line with the circumstances of the accident, ultimately saving people money.
These changes and some of the other reforms included in HB 57 will help create a fairer legal system in Louisiana, moving it away from one that favors plaintiffs and results in high auto insurance rates and other needless cost burdens placed on the state’s working families.
“The Pelican Institute congratulates the legislature on its overwhelming passage of critical legal reforms, which will lift the burden lawsuit abuse places on all Louisianans,” said Daniel Erspamer, chief executive officer of the Pelican Institute for Public Policy. “It’s past time to Get Louisiana Working, and HB 57 will help make our state a place that creates and encourages, rather than chases away, jobs and opportunity for all its citizens.”
Lawmakers have been attempting to fix Louisiana’s terrible legal climate for a long time, including earlier this year when the legislature passed Senator Kirk Talbot’s Senate Bill 418. The tort reforms contained in SB 418 were similar to those of HB 57, but it was vetoed by Gov. Edwards. However, Edwards has said he will sign HB 57.
For far too long, Louisianans have suffered under the hidden costs of corrupt tort laws and lawsuit abuse. The reforms included in HB 57 are a great step towards reforming Louisiana’s broken legal system.