Thursday, May 23, 2024

Senate votes to change how courts handle accident claims, ban state government from spending unclaimed assets

by BIZ Magazine

By David Jacobs | The Center Square

The Louisiana state Senate on Monday approved a less aggressive version of a package of changes that would change how the state’s legal system handles automobile accident claims.

Supporters say the current system encourages frivolous lawsuits and drives up the cost of auto insurance. But unlike other bills that have been debated during this month’s special session and the last two regular sessions, House Bill 57 by House Speaker Clay Schexnayder does not call for an insurance rate reduction.

Sen. Cleo Fields, a Baton Rouge Democrat, called for an amendment that would sunset the bill’s provisions if the changes don’t lead to lower rates, but that amendment was voted down. Supporters said the bill was a “step in the right direction” but didn’t want to scare off insurance companies by mandating reductions.

The amount of money at stake in a civil action must be at least $50,000 to trigger the right to a jury trial, by far the highest such threshold in the nation. House Bill 57 would lower the threshold to $10,000, rather than $5,000 as in some other proposals that have been debated.

Schexnayder’s bill would not take away the right to sue an insurer directly, as some others sought to do, but it would ban telling the jury about the insurance company in most situations.

The bill also does not limit what plaintiffs can receive for medical damages to the amounts they actually paid for procedures, rather than the “sticker price” that most people don’t pay. Sen. Heather Cloud, a Turkey Creek Republican, said leaving out that change would fail to solve the “crisis” facing the commercial insurance market, raising her voice and using the word “crisis” three times for emphasis. She still supported the bill, however.

Senators voted 29-9 to send House Bill 57 back to the House to review the Senate’s changes. A more expansive bill by Republican Rep. Ray Garofalo still is alive in the special session, which is scheduled to end by the end of the month. Garofalo’s bill is similar to one Gov. John Bel Edwards has vetoed.

Senators also unanimously approved Senate bills 12 and 18, which would allow voters to consider changing the state constitution to ban state government from spending unclaimed assets held by the state treasurer.

Louisiana’s unclaimed property fund consists of abandoned financial assets such as old checking and savings accounts, unpaid wages, securities, life insurance payouts, uncashed checks, and the proceeds of safe deposit boxes. Historically, lawmakers have spent money left in the fund at the end of the fiscal year.

Last year, Schroder announced he would not turn over the money, saying state government is only a caretaker for the assets and has no right to spend it. His refusal prompted Edwards’ administration to file suit on the grounds that the legislature, not the treasurer, has the constitutional right to dictate spending.

Edwards won in district court, though Schroder is appealing.

Most senators already have voted in favor of the constitutional change but not enough to provide the two-thirds margin necessary to advance a constitutional change. They amended the measures Monday to protect funding for the debt payments for the Interstate-49 highway project.

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