Groups calling for an overhaul of Louisiana’s legal system say “excessive” litigation costs subtract $1.9 billion from the state’s annual economic output, leading to the loss of 19,794 jobs and a per-person “tort tax” of $417.72.
Yearly tax dollar losses are estimated at $100.3 million for state government and $84 million for local governments.
The new report by Texas-based The Perryman Group used Ohio, which recently changed its civil legal system, as a benchmark. The consultants’ assessment is fodder for groups who believe Louisiana’s system is rigged to favor plaintiffs.
“These job-killing lawsuits hurt Louisiana families, and in addition, economic opportunities are driven away while resulting costs are passed down in the form of higher prices for goods and services,” said Lana Venable, executive director of Louisiana Lawsuit Abuse Watch, which hosted a luncheon on the subject in Baton Rouge on Feb. 13.
Tort reform, broadly defined as making changes to the civil justice system to limit the ability to file lawsuits or restrict the amount of money a plaintiff can receive, will be a major theme of the Louisiana legislative session that starts March 9.
Generally speaking, proponents say Louisiana has too many frivolous lawsuits. Tort reform skeptics say it's the judges’ job to throw out meritless lawsuits, and say the proponents’ real goal is to limit citizens’ access to the courts to protect big businesses.
During the luncheon last week, Sherman Joyce, president of the corporate-backed American Tort Reform Association, described Louisiana’s legal system as an “outlier.” As an example, he pointed to the fact that a case has to be worth at least $50,000 to guarantee the right to a jury trial, by far the highest threshold in the nation.
Lowering or eliminating the threshold would make it harder for attorneys to “venue shop” for favorable judges and reduce the incentive for insurance companies to settle petty lawsuits, advocates say. The idea was defeated last year, in part because judges and clerks of court worried that an excess of jury trials would clog up the legal system.
Joyce said Louisiana should make legal reform the “centerpiece” of its business recruitment efforts.
“I don’t think there is a silver bullet,” said state Sen. Barrow Peacock, who will chair one of the Senate’s judiciary committees. But he agreed tort reform should be a top priority, and said he would endeavor to move bills quickly during session while still ensuring healthy debate.
Louisiana was ranked 49th in the U.S. Chamber Institute for Legal Reform’s 2019 Lawsuit Abuse Survey, ahead of only Illinois. The state also is featured annually in the American Tort Reform Association’s Judicial Hellholes Report.