On July 16, 2020, Louisiana Governor John Bel Edwards signed into law the “Civil Justice Reform Act of 2020”. The law enacts significant changes to the Code of Civil Procedure, Code of Evidence, and Civil Code Ancillaries which will take effect January 1, 2021. The changes will not be applied retroactively to causes of action arising before, or pending prior to, the effective date.
The two biggest changes are the decreased jury threshold and revision and codification of the Collateral Source Rule. The amount in controversy required for trial by jury in delictual and quasi-delictual cases was lowered from $50,000 to $10,000. The party seeking a jury trial must now post a $5,000 cash bond within sixty days of making the jury request; failure to timely post the bond is considered waiver of the right to a jury. In an effort to further limit access to district courts, peremptory deadlines were imposed to prohibit the transfer of cases filed in courts of limited jurisdiction to district courts.
A long held jurisprudential tenet in Louisiana tort litigation, the Collateral Source Rule, controlled recovery of past medical expenses based on the source of payment and often provided a windfall to plaintiffs for expenses paid by a health insurer or Medicare. The Collateral Source Rule is now significantly revised and codified in La. R.S. § 9:2800.7. The new statute eliminates the windfall by limiting recovery of past medical expenses to the amount actually paid, plus forty percent for the cost of procurement (if any), subject to a defense argument of reasonableness. Evidence of payments or the source thereof cannot be presented to the jury and is only considered after a verdict is rendered to adjust the award for damages.
The Code of Evidence was changed to prohibit any evidence or mention of the existence of an insurance policy which provides coverage for the loss, unless coverage is a question of fact before the jury; the existence of insurance coverage can be used to attack a witness’ credibility; the insurer is a direct action defendant without the named insured; or, in cases against insurers for bad faith. Policy limits can also now be introduced in limited cases against insurers only.
The last item in the Act repeals in its entirety a quasi-evidentiary regulation which prohibited introduction of evidence that a plaintiff was not wearing a seat belt at the time of injury. Defendants were previously prevented from asserting the affirmative defenses of comparative fault and failure to mitigate as each related to plaintiffs’ failure to use a seatbelt.
Proponents of the bill are confident that these changes will decrease auto liability litigation in Louisiana by encouraging pre-suit settlements and allowing defendants more access to juries. The bill was met with opposition from the plaintiffs’ bar, who argue the changes will pressure more plaintiffs into accepting unfair settlements, and district court judges, who are concerned about a deluge in low-value injury cases which they argue will bog down their entire docket.
If you have questions regarding these significant changes, please contact Doris Royce in our New Orleans office.