Jun. 23--After two years of intense debate, the state Senate Monday night approved a watered-down version of legislation aimed at lowering auto insurance rates by changing how Louisiana's civil justice system operates.
"Instead of home run, it's a triple," said Sen. Barrow Peacock, R-Bossier City. "This brings us more in line with other states."
Not all the senators who support what they call "tort reform" was happy with the bill.
A visibly angry Sen. Heather Cloud, R-Turkey Creek, said: "This bill will not effectively address the crisis, the crisis, of insurance rates in this state." But she added that she would support the legislation.
Peacock, who as head of the Senate Judiciary A committee was handling the legislation for House Speaker Clay Schexnayder, countered that House Bill 57 is a good first step and vowed to return to the issue in the future.
The Senate voted 29-9 for House Bill 57 after making the changes that angered Cloud and others on the Senate floor. All the Republicans and two Democrats voted in favor of the legislation.
The legislation returns to the House to consider the amendments, including one that stripped out the most contentious issue: whether to pass a law limiting the injured party's medical recompense to what they paid their own insurers to treat car wreck injuries caused by the other driver. Opponents argued that such a law would penalize an innocent victim responsible enough to buy an insurance policy that discounts treatment costs. (An injured person without adequate insurance would receive the full cost charged by the physician without discounts.)
Healthcare insurance companies opposed the change to the collateral source rule that the auto insurance industry wanted, Peacock said.
"We couldn't come to an agreement on making collateral source work. It's hard to thread that needle," Peacock said in an interview after the Senate vote. "We're going to continue to work on it."
Collateral source is a rule based on a series of judicial opinions stretching back 166 years. The U.S. Supreme Court found that judgments in tort claims should punish the offender for his negligent action. That didn't square, in the 1854 case, with the owners of the ship causing the accident wanting to benefit from the other ship's owners having bought insurance to cover its losses.
Trying to thread that collateral source needle during the regular session led to wording that mistakenly enriched plaintiffs whose injuries were fairly minor. Once the mistaken wording was discovered, the bright sheen on last session's "Omnibus Premium Reduction Act" tarnished considerably. Gov. John Bel Edwards ended up vetoing that bill.
Supporters among the business and insurance communities argue that the way Louisiana conducts its civil courts is outside the norms accepted across the rest of the country leading to more injury lawsuits being filed and that's why the state's drivers pay the second highest insurance rates in the country. Changing how the courts operate would lower policy prices by 10%, maybe even 25%.
Opponents among lawyers and judges counter supporters presented no evidence that rates would fall. But the dramatic changes to Louisiana's civil system would strain case docketing, would stress court proceedings and would leave people injured in accidents more beholden to insurance companies because litigating successful lawsuits would become much more difficult.
Initially, supporters sought to make technical changes to state law on evidence and procedures: extending the deadline for filing a lawsuit from one year to two, called prescription; lowering the amount of damages sought in order to have the case heard by a jury instead of a judge from $50,000 to $5,000, called jury threshold; enacting a law to limit medical expenses recovered to the actual payments made, rather than what a health care provider charges, called collateral source; requiring lawsuits to be filed against the other driver, rather than the insurance company, called direct action; allowing judges and juries to know if the injured plaintiff was not wearing a safety belt.
Schexnayder dropped any pretense of lowering auto insurance rates and called his bill the "Civil Justice Reform Act of 2020." HB57 never included changes to prescription and set the jury threshold at $10,000.
After the Senate amendments, the key points the measure shared with the initial omnibus bills were lifting the gag rule on seat belts, thereby allowing the jury to know if the injured party was wearing a seatbelt, and forbidding the jury from finding out the name of the defendant driver's insurance company.
"It's a small step, but it's a step," said state Sen. Kirk Talbot, the River Ridge Republican who sponsored the legislation that passed June 1 in the waning minutes of the regular session and was ultimately vetoed by Edwards.
"In order to do any kind of guaranteed rate reduction you need to check all those boxes," Talbot said about the points initially in his and other omnibus bills. "But, I still think the bill has value."
Peacock hopes to move another House-passed bill -- one with all the elements initially sought -- when the committee meets later this week.
With only eight days before legislators adjourn from special session, a veto override, repeatedly threatened over the past few months, is realistically off the table. Depending on when HB57, or another "tort reform" bill is finally approved by both chambers, Edwards would have 10 or 20 days to veto the legislation, if that was his decision. Either way, the Legislature would have left Baton Rouge and would have to return in a few weeks to negate a gubernatorial veto, which historically has never happened. The only other veto overrides in the past half century took place while the Legislature was still in session.
Voting for civil justice system revamp (29): President Cortez, Sens Abraham, Allain, Bernard, Cathey, Cloud, Connick, Fesi, Foil, Henry, Hensgens, Hewitt, Johns, Lambert, McMath, Milligan, F. Mills, R. Mills, Mizell, Morris, Peacock, Pope, Reese, Smith, Talbot, Tarver, Ward, White and Womack.
Voting against HB57 (9): Sens Barrow, Boudreaux, Bouie, Carter, Fields, Harris, Jackson, Luneau and Price.
Not Voting (1): Sen.Peterson.
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