BRAC report: Excessive tort costs Capital Region over $200M a year

Louisiana’s legal environment costs the Capital Region more than $200 million in excessive tort costs each year, according to a report released today by the Baton Rouge Area Chamber. 

The report, which BRAC released touting its support for tort reform, examines the state’s current legal system, and notes rules that make the state an outlier at the financial expense of its residents.

The annual negative impact on the Capital Region is estimated at $206 million, along with 3,000 jobs lost and $171 million in lost personal income. Statewide, the legal rules have a $1.4 billion negative impact, according to the report. 

The report also notes that the average annual auto insurance rate in Baton Rouge of $2,800 is nearly double the national average of $1,500, and that Louisiana’s $50,000 civil jury trial threshold is the highest in the nation, a stark contrast to the second-highest at $15,000. Thirty-six states require no dollar threshold.

Louisiana’s tort environment has long been blamed for the state’s above-average auto insurance costs, and has been a top priority for legislators this session, despite tight deadlines because of the pandemic. 

The report comes one day before the House Committee on Civil Law and Procedure is set to take up HB-9, or the Omnibus Premium Reduction Act of 2020, filed by Rep. Ray Garofalo R-Chalmette. That bill would reduce the jury threshold from $50,000 to $5,000 and remove a rule allowing claims to be filed against the insurance company, rather than by the defendant by name.

In early March, BRAC revealed tort reform as one of its main priorities this legislative session, along with employee identity protection and career training. Read the full report.

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