(The Center Square) − Some legislators and regulators are losing patience with reforming Louisiana’s civil law environment and are looking to other means of tackling the state’s high insurance rates. Others remain convinced that tort reform is key to addressing the high rates.
In a recent panel hosted by the Public Affairs Research Council of Louisiana, Sen. Jay Luneau, D-Avoyelles, said that “tort reform has never lowered insurance rates for automobiles in Louisiana. Not a single time.”
Luneau is correct. In the 2024 legislative session alone, lawmakers passed five tort-reform related laws aimed at property and auto insurance, yet rates have remained stubbornly high.
2020 was also a year of extensive tort reform. That year, the Civil Justice Reform Act lowered the jury trial threshold from $50,000 to $10,000, limited recoverable medical expenses to amounts actually paid rather than billed, and allowed seatbelt usage evidence in civil cases. It also restricted jury exposure to insurance details, barring disclosure of an insurer’s identity except in limited circumstances.
The act lowered the collateral source rule by 60%, meaning those at fault can reduce their liability by 60% of the compensation the plaintiff receives from other sources.
Upon the act’s passage, then-Insurance Commissioner Jim Donelon said the reforms “will lower car insurance premiums across the state.” Rates didn’t budge; in fact, they slightly increased, according to the Insurance Research Council.
Still, some lawmakers are having trouble leaving tort reform in the rearview mirror.
In the same PAR panel, Rep. Gabe Firment, R-Grant, challenged Luneau’s apprehension to any more tort reform.
“If nuclear verdicts are not a problem, why are the plaintiff attorneys bragging about it?,” Firment questioned. “Go to their websites, go to their social media. See how many ten million plus verdicts they’ve got on their websites…that’s how they’re marketing their their services.”
Temple told The Center Square that he is working with legislators on a package of “comprehensive legal reform” aimed at high rates of bodily injury and litigated claims.
“Both are twice the national average and must be addressed as part of our efforts to bring insurance relief to Louisiana families and businesses,” Temple said.
It’s not hard to understand why lawmakers have been hellbent on reducing the legal exposure for insurance companies. In such a litigious environment that regularly favors plaintiffs and concludes in high payouts for the injured or the underinsured, it seems inevitable that insurers would be forced out of Louisiana or be forced to raise their rates.
“We have an availability problem because of the legal environment in Louisiana,” Tim Temple, commissioner of the Louisiana Department of Insurance, said in October.
And when major legislation is passed without progress, it’s understandable that some lawmakers might yearn for more, especially when industry representatives and experts are testifying to the cost of Louisiana’s legal environment.
In December, Linda Biernacki, the president of Fire Tech Systems, described a lawsuit involving her company despite video evidence exonerating them.
“We got her on video saying she didn’t have any problem. We got her husband on video saying, ‘Oh no, we’re not going to sue,’ Biernacki told the House Insurance Committee. “Well, lo and behold, these ambulance chasers come, and they actually talk them into suing us.”
Take Randy Guillot’s testimony in October. Following a minor sideswipe incident where his company was found at fault, what could have been a straightforward claim spiraled into a complex and costly legal battle. The plaintiff sought treatment from Alliance Treatment Facility, a provider that also acts as a third-party litigation financier.
According to Guillot, the injuries presented by the plaintiff were not substantiated by the minimal damage from the crash, but Alliance billed as if they were far more severe, driving up the total payout.
“Recent gubernatorial vetoes by both the current and previous administrations also have stymied meaningful progress,” the American Tort Reform Association told The Center Square. “These vetoes blocked legislation intended to prevent plaintiffs from receiving windfall damages based on inflated medical prices as well as legislation to require disclosure of third-party litigation funding agreements.”