Report Highlights Louisiana’s Tort System as Barrier to Social Mobility

A report published this week by a Washington, D.C.-based think tank ranks Louisiana as the worst state for social mobility, and links the state’s lawsuit abuse climate as a factor for why many residents never get ahead.

Archbridge Institute published the report,”Building On Momentum: Louisiana’s Path To Mobility,” with an index that ranks where states perform at enabling citizens to achieve social mobility. Archbirdge defines social mobility as “opportunity to better oneself and those around them” in the pursuit of achievement, aspirations, purpose, and skills development.

The institute analyzed each state using four broad areas it says contribute to social mobility:

• Entrepreneurship and economic growth
• Institutions and the rule of law
• Education and skills development
• Social capital

States in the southeast and south central regions dominate the bottom of the rankings; Texas is No. 45, followed by No. 46 Georgia, No. 47 Alabama, No. 48 Arkansas, No. 49 Mississippi and No. 50 Louisiana.

Utah is ranked No. 1 for social mobility, joined at the top by No. 2 Minnesota, No. 3 Montana, No. 4 Delaware and No. 5 Vermont.

Louisiana’s position at the bottom of the index is driven by the state’s poor tort system, the report says. Louisiana ranked last in trial judges’ impartiality, and in the bottom two for trial judges’ competence and the quality of the appellate review process, resulting in a total cost per capita is over $4,000, or 3% of the state’s GDP, according to Archbridge’s analysis.

“In Louisiana, this is largely driven by automotive and general/commercial litigation,” the report says. “This can help explain the seemingly ever-growing cost of home and auto insurance in the state.”

Archbridge recommends that Louisiana advance more tort reforms, like the state has done to reform tax, education and regulation.

Louisiana lawmakers last year already passed a package of auto and property insurance reforms that aim to cut down on social verdicts and bring more insurers to the state.

The report urges Louisiana to go farther by reforming the state’s pure comparative negligence law, which allows for someone to potentially recover damages even when they were largely at fault.

Archbridge cites an example of a plaintiff who sues for $1 million, but is found to be 99% at fault. In that case, they could still receive 1% of the settlement, or $10,000.

“This incentivizes frivolous lawsuits that drive up expenses, benefiting personal injury lawyers,” the report says. “Most other states do not allow plaintiffs to receive anything if they are deemed to be more than 50% or 51% at fault.”

Archbridge recommends Louisiana put a cap on contingency attorney fees, which the institute says could help mitigate the number of cases brought forward.

The full report can be found here.

Photo: The Louisiana State Capitol in Baton Rouge.