Louisiana's Judicial Problem

Date: January 14, 2020

A recent report by the American Tort Reform Foundation found numerous issues with Louisiana’s judicial environment.

The Bayou State ranked No. 4 last year for the American Tort Reform Foundation’s annual survey on judicial hellholes. The report cited a number of different factors, including the legislatures’ failure to address lawsuit abuse and hiring contingency-fee legal representation as the basis for the state’s poor ranking.

According to the report, families and businesses paid almost $7 billion in costs related to tort litigation in 2016. More recently, litigation costs equaled nearly 3 percent of the state’s Gross Domestic Product with estimated losses of $1.1 billion in annual costs. Over 15,500 jobs are lost each year in all major industries due to lawsuit abuse.

The combined cost of lawsuit abuse to state and local governments cost taxpayers over $140 million.

Although legislators introduced several bills to improve Louisiana’s judicial system in the last legislative session, none of the bills passed. One of the most significant bills, the Omnibus Premium Reduction Act, which aimed to lower auto insurance rates for Louisiana consumers and businesses, passed in the state’s House of Representatives but died in the state’s Senate Judiciary Committee, members of which are largely trial lawyers. 

The report also cites the state’s highest-in-the-nation jury trial threshold of $50,000. As a result of this policy, 53 percent of all plaintiffs in the state ask for less than that amount.

Plaintiff-friendly, rather than neutral, tort laws place Louisiana’s small businesses at risk for frivolous and targeted lawsuits. They drain the economy, both by tying up small business’ resources and also by leaving taxpayers on the hook for state and local government’s costs.

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