“Tort reform” has been on legislative hiatus since John Bel Edwards, a small-town lawyer, became governor in 2016.
That changed when the Louisiana Legislature convened in April largely because of pressure from increasing prices for the insurance required to legally drive a vehicle in this state coupled with the politics of a potent issue with the GOP base and the re-election effort by the Deep South’s only Democratic governor.
This week, legislators will vote on three surviving measures, including one that amounts to a bucket list for the tort reform movement that would change how Louisiana courts operate and force litigants into pre-trial negotiations that proponents say could ultimately lower auto insurance premiums but opponents say would leave people injured in car accidents at a disadvantage.
“Isn’t this bill really about politics?” Marksville Rep. Robert Johnson, who heads the House Democratic caucus, asked Kirk Talbot, the River Ridge Republican championing the biggest of the tort reform measures, on the House floor. Tort reform has been a key component of GOP platforms since George W. Bush was governor of Texas in the 1980s.
A sweeping proposal to change Louisiana’s legal system to drive down costs for auto insurers, a measure proponents say would reduce auto insur…
Republican legislators filed several “tort reform” bills, so called because of changes to legal technicalities they say are unfair to business. The attorneys who represent injured people, commonly called trial lawyers, have struck back with bills that restrict how insurance companies go about setting rates.
For the most part the legislation has gone nowhere.
An effort to put a moratorium on highway billboards, in part because of anger over trial lawyer ads, was crushed in a 14-3 vote by the House Transportation committee. The full House rejected on a 40-45 vote legislation that would have expedited jury trials. A trial lawyer bill to limit the use of credit ratings in setting auto insurance rates was deferred Thursday by the Senate Insurance committee.
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Two minor measures are still play.
Senate Bill 154, which would remove from the jury’s hearing the decision over whether to introduce that a wreck victim was not wearing a seat belt, is on the agenda Monday for a full vote by the Senate.
On Wednesday the full House is set to vote on House Bill 229 that would make the violation of driving while using a cellphone more black and white by dramatically limiting the ability of a defendant to show that the infraction fell under one of a handful of the law’s exceptions.
But high noon for the tort reform movement comes on Tuesday when Senate Judiciary A committee takes up Talbot’s “Omnibus Premium Reduction Act of 2019.” The measure changes four long-sought legal procedures in a way supporters say could lead to lower auto insurance rates. The Louisiana Association of Business & Industry has called House Bill 372 the most important legislation of the session.
Critics say the bill dramatically restricts access to the courts for crash victims. Trial lawyers argue HB372 ignores more important reasons for high auto insurance premiums, and state trial judges say the changes will clog the courts.
The Senate Judiciary A committee has been protective of changing how Louisiana courts operate since Port Allen Republican Rick Ward III became chair.
“I’m optimistic, but I’m realistic” of the bill’s chances, Talbot told The Advocate on Friday. He’s hopeful that the 69-30 vote in the House — one shy of a veto-proof majority and including a half dozen Democrats — will be persuasive to committee members.
“It is a tort reform bill,” Talbot said. But that’s only because the system has led to an increased ease of filing lawsuits. Litigation plays a significant role in increasing insurance company costs, which in turn have led to policy premiums going up 52% since 2011 for Louisiana drivers.
Worse, Talbot said, six insurance companies last year gave up on Louisiana, leaving fewer companies to compete.
“We have to stabilize the auto insurance side,” Talbot argued. “The situation has become untenable.”
At $2,298 per year, the average annual price for an auto insurance policy in Louisiana is $841 more than the national average of $1,457, according to an April 16 survey by Insure.com, a Foster City, California, internet company that compares policy prices.
Michigan leads the pack with a $2,611 average with Louisiana ranked second, just ahead of Florida at $2,219.
Insure.com attributes Michigan’s high prices to no-fault car insurance that covers most of the medical expenses of policyholder, family and passengers injured in car wrecks. For Florida, the group cites a study by the Insurance Research Council, an industry-funded analyst firm based in Malvern, Pennsylvania, which found about a quarter of that state’s residents don’t carry car insurance.
Insure.com quotes the same IRC study that shows almost 40% of Louisiana drivers carry the absolute minimum coverage: $15,000 per person and $30,000 per accident for bodily injury claims and $25,000 for property damage. The group notes that coverage levels are so low that many drivers turn to the legal system to get a higher payout.
It’s the number of lawsuits filed that is out of whack with the rest of the country, Jeff Albright, chief executive officer, Independent Insurance Agents & Brokers of Louisiana, has testified to over and over in committees this past month considering tort reform bills.
Louisiana is about in the middle of the nation’s statistics when it comes to the rate of accidents. And the number of claims for property damage is just a little higher than the national average, he said.
“Our bodily injury rate, how often we claim we are injured, is almost double the national average,” Albright said. “Rep. Talbot has a tort reform bill that is aimed at trying to change the litigation climate.”
Talbot’s measure would increase the time that victims of crashes have to file a lawsuit from one year to two; reduce the jury trial threshold from $50,000 to $5,000; take away the ability to sue the insurance company directly; plus allow judges and juries to review claimed medical costs.
Voting along party lines a Louisiana House committee Monday approved legislation that critics say dramatically restricts auto crash victims’ a…
The bill also includes a provision that if costs go down, the Department of Insurance would push insurance companies to lower their rates.
Robert Kleinpeter, a Baton Rouge trial lawyer, points to studies by Property Casualty Insurers of America that put litigation at the bottom of a list of factors — including urban congestion, distracted driving and poor roadways — that influence premium prices.
The state’s chief actuary, Richard Piazza, doesn’t disagree. There’s no data directly linking Talbot’s systemic changes with lower prices in other states.
It’s a point conceded by a chief lobbyist for the auto insurance industry.
“It’s a misnomer to ever really believe that your rates are going to go down,” testified Kevin Cunningham. “There are so many pressures for it to go up: medical costs continue to go up, the cost of the vehicle continues to go up, the amount of wages that you have to compensate for continues to go up. So maybe what you do is slow the rate of rise.”
If Talbot’s bill is approved by both chambers by June 6, whether it is signed into law ultimately rests with the governor, who is noncommittal until he sees how the finished product reads.
“The irony of it, it’s called a premium reduction bill. There’s not a single premium that’s reduced by the bill,” Edwards told reporters last week. “But I’ll look at it if and when it gets to my desk.”