New Tort Reform Legislation Could Alter Louisiana Litigation Climate

On May 29, 2020, Senate Bill 418, seeking to make sweeping changes in Louisiana tort litigation, was passed in the House of Representatives by a vote of 72 to 28. It has been predicted that Governor John Bel Edwards would veto any tort reform bill passed, but the Bill may have enough votes to override a gubernatorial veto. At this time, the sponsors of the Bill are negotiating certain provisions with the Governor’s office and the Bill’s opponents, in order to avoid a veto. The main provisions of the “Omnibus Premium Reduction Act of 2020” that were passed are as follows:

  1. The liberative prescriptive deadline (statute of limitations) for filing tort claims arising from the operation or control of any motor vehicle, aircraft, watercraft or other means of conveyance would be extended from one year to two years. This would theoretically give insurers more time and opportunity to resolve cases prior to litigation and incurring defense costs.
  2. The amount in controversy required for a trial by jury would drop from $50,000 to $5,000.
  3. The Act would essentially do away with the “collateral source rule” and would only allow recovery for amounts actually paid by health insurers, Medicaid, Medicare or workers’ compensation. Plaintiffs would no longer be allowed to recover the higher amounts charged by the provider and later written off or discounted after payment by the insurer.
  4. The Act would severely limit the Louisiana Direct Action Statute and provide for only very limited circumstances in which a liability insurer could be named as a party in tort litigation. This would bring Louisiana in line with most states which allow suits to only be filed against the insured. This would prevent jurors from knowing about the presence or existence of insurance when considering their verdicts.
  5. The Act would repeal La. R S. §32:295.1(e) which prohibits consideration of a plaintiff’s failure to wear his or her seatbelt as evidence of fault or failure to mitigate damages. Under the new legislation, juries would be allowed to consider the plaintiff’s failure to wear his or her seatbelt as evidence of comparative fault and/or a failure to mitigate damages.

If the Act becomes law, the landscape of Louisiana litigation will change significantly. It is anticipated that some of the provisions above may be curtailed in any negotiated legislation signed into law. Mouledoux, Bland, Legrand & Brackett will continue to provide updates.