Business groups see an opportunity with the new, more conservative Republican-led Louisiana Legislature to gain traction on a top goal, to rein in civil lawsuits and damage awards against them.
GOP lawmakers have made the idea their top priority for the three-month legislative session that started Monday, filing a long list of bills on the subject.
Challenges to passage involve whittling down the so-called “tort reform” proposals to an achievable, more focused package — and battling the influence of personal injury lawyers and others who oppose the measures.
The biggest unknown involves Democratic Gov. John Bel Edwards, who could jettison the bills if they reach his desk. The governor has offered only vague statements about being willing to negotiate on the issue with lawmakers.
Significant changes were last made to the civil litigation system more than 20 years ago during Republican former Gov. Mike Foster’s tenure. Business lobbyists have gained a toehold with the ideas this time by tying the changes to a consistent irritant for Louisiana residents: the cost of car insurance.
Louisiana’s automobile insurance rates are second-highest in the nation, averaging around $2,200 per year, according to Bankrate.com and other websites that track the auto insurance industry.
Many Republican lawmakers ran on the idea that Louisiana’s legal climate encourages people in car accidents to sue insurance companies and other businesses, driving up insurance premiums. The lawmakers — and industry — argue that lessening those lawsuits and the payouts awarded through them could lower automobile insurance.
Business organizations say the number of car accidents in Louisiana is only slightly higher than the national average, but the number of people who claim injuries in an accident is twice the average.
Sen. Heather Cloud, a Turkey Creek Republican, said her trucking business is “hanging on by a thread” because of high insurance costs. She believes drivers target truckers in accidents “because they’re promised big payouts” in lawyer advertisements.
Supporters of the civil litigation system rewrite say if Louisiana makes it harder to win large damage claims in injury lawsuits, that could help draw more insurance companies, creating competition that will force down rates. They say curtailing what they consider an overly litigious environment in Louisiana could attract businesses beyond the insurance industry to the state, creating jobs and boosting economic investments.
“It is our legal environment that hurts that prosperity that we need to have in our state,” said Sen. Barrow Peacock, the Shreveport Republican who chairs the judiciary committee that will hear many of the civil lawsuit-themed bills.
Critics, including plaintiffs’ attorneys, counter there’s no proof legal system changes would lower insurance rates. They say the changes could keep people injured in car accidents from adequate compensation while ignoring other reasons insurance premiums are so high, such as distracted drivers, uninsured drivers and poor road conditions.
An organization calling itself Real Reform Louisiana — run by several Edwards allies — suggests business lobbyists are pushing the civil litigation bills to boost their bottom lines.
The organization says other approaches will force down car insurance rates, such as limiting what insurance companies can use to set premiums, requiring the industry to release details of how it calculates rates and pressuring GOP Insurance Commissioner Jim Donelon for tougher regulations.
“Tort reform will just pad the profits of insurance companies and big business by rigging the courts against the people of Louisiana,” Eric Holl, executive director of Real Reform Louisiana, said in a statement.
If lawmakers pass the bills, it’s unclear what Edwards, who won his reelection bid with significant support from personal injury lawyers, will do with them.
The only car insurance-related bills on Edwards’ legislative agenda are filed by Democratic Sen. Jay Luneau of Alexandria, to prohibit auto insurance companies from using gender, credit scores, military deployments and certain other “risk classifications” to set rates.
“I think we ought to focus on making changes that are proven to have a direct impact on the cost of premiums,” Edwards said as he touted Luneau’s proposals.
That comment suggests the governor doesn’t see a clear link between changing access to the courts and insurance costs.
If Edwards rejects civil litigation measures that reach his desk, Republicans would need to vote as a bloc and get help from non-GOP lawmakers to attempt a veto override. Republicans have a two-thirds super-majority in the Senate to override a gubernatorial veto, but fall two votes short of that benchmark in the House.
- Auto Insurance Reform, Minimum Wage Hike on Louisiana Governor’s Legislative Agenda
- Louisiana Commissioner Candidate, Temple: State Is in Insurance ‘Crisis’
- Louisiana Commissioner Donelon: Tort Reform Needed to Fix Auto Insurance Crisis
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