We’ve heard a lot about tort reform over the last few years in connection with the high cost of auto insurance in Louisiana, but what does it mean? “Tort” is defined as a wrongful act leading to civil legal liability, or doing something that leads to a lawsuit.
When a motorist is involved in an auto accident, there is always the possibility that someone or some company is going to get sued for damages and personal injuries. The person doing the suing is called the plaintiff and the other person or company being sued is the defendant.
Why change current law? In 2018, Louisiana had the second-highest auto insurance rates in the country. The average premium was $2,298 compared to the $1,470 national average. Michigan had the highest rates at $2,693.
The Advocate reported that business interests, insurance companies and many Republicans who agree with them say the number of Louisiana wrecks and injuries are in line with the rest of the country. However, they say the way Louisiana courts handle lawsuits contributes to the high number of injured people going to court to seek damages.
The newspaper said lawyers, judges, health care providers and their Democratic allies say changing current law would make court cases too difficult. They believe injured people would be more likely to accept insurance company offers rather than go to court.
Under current law in Louisiana, a jury can hear an auto accident lawsuit if it involves more than $50,000. Those who want to reform current law would like that to be just more than $5,000. They believe the threat of a jury trial would create more legal settlements without having to go to trial.
House Speaker Clay Schexnayder, R-Gonzales, sponsored House Bill 57, the tort reform bill that was approved during the special session that ended June 30. Neither side got everything it wanted.
The legislation lowered the jury threshold to $10,000 instead of the $5,000 tort reformers wanted. Opponents of the lower amount said it would swamp state district courts. The Advocate said Gov. John Bel Edwards wanted a $25,000 jury threshold, but he said he would still sign the bill.
Current law says the fact a defendant wasn’t wearing a seat belt can’t be used in court. HB 57 will allow that fact to be used at a trial because it is believed a jury, when deliberating a case, would factor that into its decision.
Supporters of changing current law didn’t want the name of a defendant’s insurance company to be named at the trial. Insurance companies believe juries give higher awards when they believe an insurance company is paying. The bill that was approved forbids mentioning the defendant’s insurance company except at the beginning and end of the trial.
“Collateral source” is another legal term used in connection with these lawsuits, and it stayed in the bill. It refers to a person who is injured and his or her insurance company pays for their medical treatment. The injured person often receives a discount from what is regularly charged.
Tort reformers wanted collateral source to stay in the bill because they say it’s unfair to make a defendant pay damages for which the injured person has already been paid. Opponents said court decisions have ruled that those responsible for the accident shouldn’t benefit because the injured person had bought their own insurance.
HB 57 limits medical damages to the amount actually paid. However, a trial judge after the verdict can look at the difference between what was paid and what was billed, then award up to 40 percent of the difference.
Those supporting tort reform wanted to extend the deadline for filing a lawsuit from one year after the accident to two years, but that isn’t in the bill. Reformers said the longer period would lead to more settlements that don’t involve the courts.
Supporters of tort reform consider Schexnayder’s legislation only the beginning. They hope to continue reforms at future sessions. Opponents will continue to keep up their resistance to any additional major changes in the law.
Trucking spokesmen said lawsuit abuse has sent their insurance rates skyrocketing, forced motor carriers out of business and hampered the industry’s ability to safely and efficiently move the country’s freight.
“This (new law) is no silver bullet to take care of everything,” said Randy Guillot, chairman of the American Trucking Association (ATA). “But it is an omnibus tort reform bill that takes a lot of things in a positive direction. This is a great thing for the trucking industry and Louisiana. We got meaningful tort reform passed that’s been a long time coming.”
Legislative leaders, Edwards and tort reform supporters and opponents deserve credit for working together to forge this compromise legislation. Now, everyone involved needs to give these legal changes enough time to see whether they help lower auto insurance rates.