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How tort reform can help protect the Louisiana economy

On Behalf of | Oct 27, 2023 | Civil Law

The Louisiana civil courts allow those negatively impacted by the actions of others to seek economic justice. A successful lawsuit can compensate people for lost wages, property damages and medical expenses generated by the negligence, omissions or misconduct of an outside party.

Unfortunately, there are plenty of people who abuse a system put in place to protect individuals. Some people file lawsuits in scenarios where they are clearly primarily to blame for an unfavorable outcome. Others may exaggerate the impact of an incident in hopes of seeking financial compensation that they may not actually deserve. Louisiana state lawmakers have begun looking into tort reform to address some of these concerns recently as a way to protect not just businesses but also individuals around the state.

Why is there a push for tort reform?

A tort is a wrongful act or behavior that infringes on the rights of one party. Someone pursuing a personal injury lawsuit, for example, would allege tortious behavior on the part of the defendant. Seeking to limit such cases may initially seem like an infringement on the rights of those harmed by others.

However, excessive and frivolous litigation has already caused significant damage to businesses and individuals across the state of Louisiana. Researchers claim that excessive and frivolous lawsuits in Louisiana have cost the state roughly 50,000 jobs. Even worse, these lawsuits have cost individuals around the state appropriately $3 billion in income losses.

Research has found that a significant portion of the economic impact, including the lost jobs and direct financial harm, occurs near New Orleans in particular, although Baton Rouge also sees a significant number of lawsuits every year that may affect business operations and the caliber of job opportunities for those seeking gainful employment.

Researchers estimate that the capital region loses roughly $690 million in personal income annually and roughly 10,000 jobs. Each person pays a “tort tax” of more than $1,200. Tort reform could therefore benefit everyone. Changes to civil litigation laws would potentially diminish the financial impact that lawsuits have on companies operating in Louisiana and individuals across the state, including those here in the capital region.

Becoming more familiar with how litigation affects everyone, not just the plaintiffs and defendants in a case, may help people better understand why such reform is necessary for the future development of the Louisiana economy.