The Louisiana Senate approved Monday sweeping tort reform legislation, which supporters promise will lower the price of auto insurance in Louisiana, with more votes than needed to override a gubernatorial veto.
Senate Bill 418, called the Omnibus Premium Reduction Act of 2020, dramatically changes how people injured in car wrecks can seek – and receive – recompense through Louisiana courts.
After more than two hours of debate that included supporters batting away amendments, the Senate voted 29-8 to send Senate Bill 418 to the Louisiana House, which has on its calendar a bill of its own with nearly identical wording. Gov. John Bel Edwards, who is supported by lawyers who represent injured plaintiffs, has spoken against parts of the bill but favorably for other parts.
If he were to veto SB418, the legislature could override with a two-thirds vote in each chamber. The Senate would need 26 votes to override. The House needs 70. A similar bill passed the House last year with 69 votes but was beaten in the Senate Judiciary A committee. The session must adjourn in two weeks.
That the legislation would pass Monday was never in doubt. Since that 2019 vote, the Legislature elected a number of new members who ran on lowering the cost of auto insurance via tort reform. The issue came up during the Edwards’ reelection campaign and lobbyists for the business and insurance industries kept tort reform alive throughout the coronavirus pandemic.
Louisiana has among the highest auto insurance rates in the nation, which business and insurance blame on the state civil justice system being out of line with the rest of the country. They claim the system makes it too easy to file lawsuits for minor injuries.
“It’s our duty and our job to step up and fix this,” said Sen. Kirk Talbot, the River Ridge Republican who sponsored SB418 and last year’s measure when he was a House member.
Sen. Jay Luneau, an Alexandria Democrat who makes his living as a lawyer, shook his head and echoed the words of many who detail how all the sweeping changes will benefit business and insurance, at the expense of individuals, yet provide no reduction in premium prices and could very well lead to higher rates. “We sold our souls for the special interests,” Luneau said.
“We’re making it more difficult for people to get in a courtroom and have their case resolved,” Luneau said. He blames the high prices on the variables insurance companies put in their rate formulas.
Senate Bill 418 would extend the deadline for filing a lawsuit from one year to two, called prescription; lower the amount of damages sought in order to have the case heard by jury instead of a judge from $50,000 to $5,000, called jury threshold; limit medical expenses recovered to the actual payments made, rather than what a health care provider often charges, called collateral source; require lawsuits to be filed against the other driver, rather than the insurance company, called direct action; and allow judges and juries to reduce damage awards if the injured plaintiff wasn’t wearing a safety belt.
The legislation also requires insurance companies to reduce rates by 10% if their costs go down, unless they can prove to the insurance commissioner that the rate reduction would hurt their business enough to stop selling policies in Louisiana.
Supporters, including Insurance Commissioner Jim Donelon, who has pushed this legislation for years, promised the bill would reduce the price of car insurance policies by at least 10%, perhaps 25%, maybe more. But SB418 backers batted away three amendments that attempted to lock those savings into the actual wording of the measure.
“Guarantee them something. We are taking away a lot of rights from folks,” said Sen. Patrick Connick, R-Marrero, who wanted to ensure 15% decrease in prices was in the wording of the bill. “We’re giving a lot to the insurance companies.”
His amendment was shot down on a vote of 15 to 22.
"I’m not a fan of guaranteeing rate reductions, period," said Slidell Republican Sen. Sharon Hewitt. "We don’t pass any other bills that guarantees results."
State Sen. Cleo Fields, D-Baton Rouge, pointed out that previous tort reform laws were passed on promises that insurance costs would fall – but they did not. He recommended a sunset for Talbot’s legislation. “If we pass this sweeping legislation and the rates aren’t reduced in two years, then the legislation goes away. Because that means the legislation doesn’t matter,” Fields said.
His amendment was killed on a vote of 10-26.
Voting for sweeping changes to civil justice system (29): President Cortez, Sens , Abraham, Allain, Bernard, Cathey, Cloud, Connick, Fesi, Foil, Henry, Hensgens, Hewitt, Johns, Lambert, McMath, Milligan, F. Mills, R. Mills, Mizell, Morris, Peacock, Pope, Price, Reese, Smith, Talbot, Tarver, White and Womack.
Voting against SB418 (8): Sens Barrow, Bouie, Carter, Fields, Harris, Jackson, Luneau and Ward.
Not Voting (2): Sens Boudreaux and Peterson.