To their influential advocates in the Legislature, always quick to help a politically connected industry, the bail bondsmen of New Orleans are the victims of an innocent mishap.
It’s a $6 million glitch, with the bonds companies overcharging their customers 1 percent of fees, contrary to the law, over more than a decade. A bill is moving through the Legislature to prevent customers from getting refunds.
Does the bail bonds industry deserve this kind of legislative quick-fix? Or is this another case of the connected getting their way, because these are not ordinary small businesses, but folks intimately connected with lawyers and judges?
They know people, you might say. And they want their friends in the Legislature to fix their almost 14-year-old problem.
An extra 1 percent “licensing fee” on New Orleans bail bond companies was authorized by the Legislature back in 2005 to shore up the then-ailing finances of the Orleans Parish Criminal District Court.
Bail bond companies in New Orleans soon passed that fee on to customers by raising what they charged to 13% of the total bail amount — even though Louisiana’s law capping that “premium” at no more than 12 percent remained unchanged.
State Insurance Commissioner Jim Donelon ruled in February that thousands of bail bond clients in Orleans Parish are entitled to refunds. That’s an ongoing judicial proceeding, as the Donelon ruling is being contested; the Louisiana Constitution explicitly forbids new laws that short-circuit ongoing cases, advocates for those overcharged say.
We think they are correct.
Probably this will end up in a formal lawsuit one day, as Donelon’s order goes through the process.
But if fairness for business is the goal, should not also there be fairness for the customers?
The dispute is important to the larger public for two reasons.
One is that it shows the influential and connected can get help from the Legislature in a way that few small business owners can typically expect.
Bail bond firms, like practicing lawyers, are constantly involved with the courts and tend to be much more likely to contribute to political campaigns. They are part of the legal ecosystem and not ordinary small businesses.
And, two, it shows that the crazy-quilt way that Louisiana has paid for its judicial and legal systems has for years been a mess. The fee in question was intended to bail out a specific court, not to create problems for bail bond firms.
The Legislature, always reluctant to pay the bills with money that could be spent on more politically attractive causes, took a back-door approach to the Orleans court's problems.
But the bail bonds collections continued, and ignorance of the law is not an excuse. Or it is not for most people.