Monday, May 27, 2024

Louisiana group says excessive tort costs deprived state of 50,000 jobs

by BIZ Magazine

(The Center Square) – Data released Tuesday from the tort reform group Louisiana Lawsuit Abuse Watch says excessive civil court costs led to the loss of nearly 50,000 jobs in Louisiana and $3 billion in personal income losses.

The group also says excessive lawsuits are costing Louisiana residents $1,200 each in the form of what the group calls a “tort tax” and state government losses of $270 million and $225 million for local governments. The state’s legal climate also cost the state’s gross domestic product approximately $5 billion.

According to the data, both of Louisiana’s two largest metropolitan areas — Baton Rouge and New Orleans — were hit hard economically by the state’s tort system.

In the New Orleans area, excessive litigation cost residents $2.5 billion in personal income annually and the loss of more than 36,400 jobs each year. The “tort tax” in New Orleans amounts to $3,039 per person, with direct costs to both residents and businesses of $2.7 billion each year. The group also estimates $3.9 billion in gross product is lost due to excessive litigation.

According to the data, Baton Rouge residents lost an estimated $690 million annually in personal income, with 10,000 jobs lost each year in the Capitol Region. Businesses and residents lost nearly $743 million annually in direct losses, while the area’s gross product shrinks by $1 billion each year.

The group derived their data from an October 2022 report by the Perryman Group for Citizens Against Lawsuit Abuse.

“Unfortunately, lawsuit abuse continues to impact Louisiana’s citizens, businesses, and overall economy – specifically in its two largest MSAs,” said Lawsuit Abuse Watch executive director Lana Venable in a news release. “Our civil justice system exists to determine liability and provide a means to settle legal disputes, but an overly aggressive system is damaging to our economy, creating impediments to productivity and economic development.”

Louisiana’s legal system was ranked 49th by the U.S. Chamber Institute for Legal Reform’s most recent Lawsuit Abuse Climate Survey, which measures balance and reasonability of each state’s tort system. Louisiana was also ranked seventh in the 2022-23 Judicial Hellholes Report authored by the American Tort Reform Foundation.

Louisiana Legal Reform Coalition executive director Karen Eddlemon said, “From the years of ongoing coastal lawsuits involving local governments to the constant bombardment of advertising attorneys across multiple platforms, as well as legal fraud by out-of-state law firms preying on hurricane survivors, the culture of excessive lawsuits continues to be a drain on Louisiana’s residents and economy.”

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