Judicial Reform

Background:
Louisiana is considered to have one of the worst legal climates in the nation. The American Legislative Exchange Council and the U.S. Chamber of Commerce Institute for Legal Reform have ranked Louisiana near the bottom in its annual surveys for several years in a row. The surveys focus on perceptions in many areas including, overall treatment of tort and contract litigation, punitive damages, timeliness of summary judgment/dismissal, and judges’ impartiality and competence.

These rankings reflect the perception many businesses have of the state and greatly diminish economic development opportunities for Louisiana. Companies simply do not want to do businesses in states that do not have a legal climate that treats all parties equally. This holds true for insurance companies as well. Fewer companies operating in the state means less competition, which could result in higher premiums and less available coverage.

Facts and Figures:
In addition, Louisiana’s legal climate contributes to the costs insurers and ultimately policyholders pay. Louisiana insurers pay some of the highest defense costs in the country, due in part to the state’s high jury threshold, which requires that civil claims worth less than $50,000 must be heard by a judge rather than being decided in a jury trial. The $50,000 jury threshold is the highest in the country.

Legislative Action:
During the 2010 Louisiana Legislative Session, several pieces of legislation were introduced and subsequently defeated that would have further eroded Louisiana’s legal climate. These included allowing the attorney general to hire private attorneys on a contingency fee basis and expanding punitive damages in Louisiana.

Resources:
Louisiana Lawsuit Abuse Watch
Institute for Legal Reform