Excessive Lawsuits in Louisiana Result in Massive Job Losses and Economic Decline
According to a recent report released by Louisiana Lawsuit Abuse Watch, excessive civil court costs have led to the loss of nearly 50,000 jobs and a significant decline of $3 billion in personal income in Louisiana. The study also highlights the burden placed on Louisiana residents, who are facing a "tort tax" of $1,200 per person, resulting from excessive lawsuits. State and local governments have incurred losses of $270 million and $225 million, respectively, due to this issue, while the state's gross domestic product has suffered a blow of approximately $5 billion.
The data further reveals that both of Louisiana's largest metropolitan areas, Baton Rouge and New Orleans, have been severely impacted by the state's tort system. In the New Orleans area alone, excessive litigation has cost residents $2.5 billion in personal income annually and resulted in the loss of over 36,400 jobs each year. The "tort tax" in New Orleans amounts to $3,039 per person, with direct costs to residents and businesses reaching $2.7 billion annually. Additionally, an estimated $3.9 billion in gross product is lost due to the prevalence of excessive litigation.
Similarly, Baton Rouge residents have experienced an annual loss of approximately $690 million in personal income, with 10,000 jobs being lost in the Capitol Region each year. The direct losses incurred by businesses and residents amount to nearly $743 million annually, while the area's gross product shrinks by $1 billion annually.
The data presented by Louisiana Lawsuit Abuse Watch is based on a report by the Perryman Group for Citizens Against Lawsuit Abuse from October 2022.
Expressing her concerns, Lana Venable, the executive director of Lawsuit Abuse Watch, stated, "Unfortunately, lawsuit abuse continues to impact Louisiana's citizens, businesses, and overall economy – specifically in its two largest MSAs. 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 has been ranked 49th in the U.S. Chamber Institute for Legal Reform's most recent Lawsuit Abuse Climate Survey, which assesses the balance and reasonability of each state's tort system. Furthermore, it was ranked seventh in the 2022-23 Judicial Hellholes Report published by the American Tort Reform Foundation.
Karen Eddlemon, the executive director of the Louisiana Legal Reform Coalition, highlighted various factors contributing to the culture of excessive lawsuits in the state. These include ongoing coastal lawsuits involving local governments, relentless advertising by attorneys across multiple platforms, and legal fraud by out-of-state law firms preying on hurricane survivors. Eddlemon emphasized that this prevailing culture of excessive lawsuits continues to drain Louisiana's residents and economy.
The alarming findings of this report underscore the urgent need for legal reform in Louisiana. Addressing the issues surrounding excessive lawsuits will not only benefit the state's economy but also promote a fair and balanced civil justice system that upholds the principles of liability determination and legal dispute resolution.