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Avoid distractions, keep tort reform on course

Policy-makers need to keep their eyes on the ball and not let themselves become distracted by cheap political stunts that distort rather than inform.

That lesson comes from recent political theater staged by the secretive Real Reform Louisiana interest group. Its four dozen employees and $9 million in revenues hail courtesy of donors the group refuses to reveal, but whom likely overwhelmingly are trial lawyers who profit from a legal environment that is one of the most encouraging for lawsuits in the country.

It recently left tiki torches at the Louisiana Association of Business and Industry, explaining that this would equip LABI’s executive director Stephen Waguespack to go march on the Capitol. Last year, Waguespack said he would do that with such instruments in hand if passenger car rates didn’t drop in a year as a result of the Civil Justice Reform Act. That bill changed state tort laws to mirror more closely, although not that closely, such laws in other states, many whose residents pay far lower rates.

Rates apparently won’t drop in Louisiana, or a number of states, for the next year. The group has tried to parlay this into an indictment of the changes, playing on emotion rather than intellect.

Because both data and logic still point to the reform having a long-term effect of lowering rates, beginning with the fact that its new laws do look more like those in the lower-cost states. And, of course, the legal environment makes up just part of the rate determination decision, which the RRL propaganda exercise ignores in its attempt to attribute any change solely to legal changes.

Over the past decade, rates everywhere have spiraled upwards because of various exogenous factors such as higher repair costs, more distracted driving, and more expensive natural disasters (which itself is a function of larger populations and greater value of property) – more than doubling. And in the past year, Louisiana has suffered more than just about anywhere from frequency of disasters, as well as a self-inflicted wound of delaying jury trials (due to the Wuhan coronavirus pandemic) which is of particular importance as they will occur under the old rules that didn’t expire until the end of 2020 in any event.

In fact, rates overall for the next couple of years may rise because of the pandemic’s impact that caused less driving and lower rates that bucked the decade-long trend. Given all this, the new rules will have a diluted and delayed impact – but one that seems already to have had positive effects compared to keeping the status quo.

Prior to this year, Louisiana rates were the second-highest in the country. Even if not falling, rates in other states (which didn’t change their laws) appear to be rising faster, for now Louisiana has just the fourth-highest average. This relative view gives a genuine picture of reform’s beneficial impact, which given its tepid pace of implementation likely will accelerate in the years to come.

Just as the data signal the beneficial effect, they also expose RRL’s bad faith. It supported this year SB 55 by Democrat state Sen. Jay Luneau, chock full of measures empirically demonstrated to cause rates to increase – but which appeal to the political left and pose as fake reforms so as to fit the strategy of distraction pursued by RRL.

Policy-makers must stay the course. It will take at least a couple of years for the reforms’ impact to manifest to a noticeable degree, and politically realistically it would be difficult to push the state further in the direction of others as long as trial lawyer ally Democrat Gov. John Bel Edwards remains in office. But with a likely Republican reform ally in the Governor’s Mansion by 2024, more movement in the right direction will become possible, as long as lawmakers ignore special interests like RRL who work for a handful of big donors and against the best interests of the people.

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