Thursday, June 20, 2024

Waguespack: It’s Time for Some 1-800-LEGAL REFORM

by BIZ. Staff

The competition is fierce, and the competitors are upping their game to get your attention. I am sure you have seen it. How could you not? It’s everywhere. It’s on the roads… on your television… social media… radio… sponsoring your favorite sports teams… even wrapped around your local public buses.

I am talking about the saturation of advertisements for a handful of trial lawyers in Louisiana. It’s getting harder and harder to miss these billboards that line every major state roadway and the catchy commercials during every ballgame or show. Some are promising a big payout… others a family atmosphere… and some even eternal salvation. Whatever the pitch, these folks simply want your business badly and are quick to remind you that you may be one fender bender away from glory and gold.

It seems to be spiraling out of control. But why?

It’s all about the incentives created by the State Capitol over the years to promote a lawsuit culture in Louisiana.

You see, politicians and the media talk all the time about the cause and effect of business incentives. Plenty of articles have been written about tax exemptions or regulatory decisions that impact business. What has never been honestly discussed with the public are the laws the Louisiana Legislature has put in place and protected over the years to intentionally incentivize and promote one of the most active lawsuit industries in the entire nation.

It’s these stealth batch of laws and incentives that have placed a hidden amount of “tort taxes” on our people.

For just one example, let’s take a look at auto accidents.

In Louisiana, the Legislature has intentionally made it more difficult than any other state in the country for you as a citizen to get a jury trial in an auto wreck case (known as jury trial threshold). Certain lawyers actively lobby the Legislature to keep it this way because our current system makes it easier for them to get a higher judgment before a certain judge. This law/incentive alone is one of the biggest reasons we have an “off-the-charts-high” amount of bodily injury claims despite having nationally average accident data. Either we Louisianans genetically have much more sensitive bodies than other Americans or these claims are more easily padded in a “jury-less” courtroom.

But what about those cases that do get a jury… then are we in line with other states?  Well, not exactly, because there are other Legislatively-created incentives ready for that scenario too.

If you do qualify for a jury, perhaps the Louisiana law that prohibits a jury from being told about seat belt usage kicks in. This gag order makes no sense if you actually want to find the truth in an accident but makes perfect sense if you don’t want anything to stop a larger payout. Efforts to repeal this gag order have been blocked in the Legislature recently by the same trial lawyer lobby that has opposed lowering the jury trial threshold.

Collateral Source Rule? It sounds like a wonky-legal term, but all you need to know is in Louisiana it prevents a jury from hearing full information on whether claims were covered by other sources and what specific care was provided. Direct Action? This legal incentive allows the billboard lawyers to sue your insurance company directly, taking the human element away from the juries. It gives a false sense that a person will not actually be impacted by the outcome. But in fact, everyone’s insurance rates go up.

These are just a few of the laws that have become strong incentives created by the Louisiana Legislature to create a robust and competitive business environment for trial lawyers. Meanwhile, other lawsuit incentives have made their way onto the books, hitting other industries. Energy immediately comes to mind… agriculture too.

That is why the billboard lawyer advertising has become so competitive and personal. The dollars are simply too big for these guys to ignore and the competition is getting fierce. They didn’t create the market…the current and previous Legislatures and Administrations did, and history clearly tells us that incentives work. The movie studios came to Louisiana in droves when the incentive program was created, and some of them left when it was dialed back. Every industry responds the same way to incentives being loosened or reigned-in, and the billboard lawyer industry is no different.

The real question is why should you care? These commercials can be funny at times. Those jingles can be pretty catchy. If you’re not a lawyer, judge or insurance company why does any of this matter to you? Because it contributes to a damaged business climate leading to lost investment and curtailed job opportunities. It also adds more hidden costs to families than most people realize.

The U.S. Chamber of Commerce Institute for Legal Reform annually ranks state legal climates and we consistently come in toward the bottom. This year Louisiana ranked dead last in the nation. We have the second-highest automobile insurance rates in the country. These costs hit working families, farmers, young drivers and businesses alike.

Just like every incentive program, proper scrutiny should be applied. The Legislature and last few Administrations have simply not put proper scrutiny on these legal incentives that helped create such a lucrative industry. This trend of looking the other way cannot continue.

It’s time to closely examine these lawsuit incentives and get our state in line with other states. If we ever do, we just might see our legal climate reputation improve, see trust restored in the companies looking to invest here and see an auto insurance market that comes back to normal. That would lead to lower costs for everyone.

Louisiana is a wonderful place to raise a family… but that should never stop us from admitting when we have an obvious problem… and an extremely profitable and increasingly aggressive legal climate is one of them. It’s not the lawyer’s fault for competing in the market… it’s our fault as voters for letting our elected leaders create this market in the first place. The statutory fixes to this problem are easy to draft… the courage in the Capitol to pass them is what is tougher to find.

Stephen Waguespack is president of the Louisiana Association of Business (LABI)

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