Louisiana Governor Vetos Tort Reform Bill

We previously reported on Senate Bill 418, the “Omnibus Premium Reduction Act of 2020” that was passed by the Louisiana Legislature. On Friday, June 12, 2020, Governor John Bel Edwards vetoed the tort reform legislation. It is not anticipated that the legislature will attempt to override the veto.

Language Inserted Into Tort Reform Bill Caused Controversy

During the last-minute negotiations on the bill, certain provisions were modified, including the provision that attempted to abolish the collateral source rule. A provision was inserted that would have required defendants to compensate the plaintiff for up to 1 ½ times the amount of health insurance premiums paid by the plaintiff for up to a one-year period as damages if that health insurance paid for the accident-related expenses.

This last-minute language inserted into the bill caused controversy and frustration with many of the supporters and proponents of the bill. It is anticipated that in the ongoing special legislative session, additional bills will be presented in an attempt to rework certain aspects of the legislation and seek passage. At this time, however, it appears that the original efforts to make wholesale changes to Louisiana’s tort system have been thwarted.

Governor Edwards’ Reasons for Vetoing Senate Bill 418

In vetoing the bill, Governor Edwards issued a letter discussing his reasons, while expressing a desire to reach an agreement on future legislation. In the letter, the Governor indicated that he would be in favor of reducing the jury trial threshold in Louisiana somewhat from the present threshold of $50,000.00. The Governor also indicated that he would support the elimination of the seatbelt evidentiary prohibition and that he would agree to some modifications of the collateral source rule. It is anticipated that there will be further developments in the upcoming legislative session with regard to the prior bill’s provisions.

Collateral source rule led to SB 418’s demise

In this author’s opinion, however, the most significant proposed changes were those to the collateral source rule, which would have significantly lowered the amount that defendants would pay medical costs in some cases. It is not surprising that this was the provision that ultimately led to SB 418’s demise.