With the Louisiana Legislative session closed and the Governor’s veto-time running out, here is a roundup of some of the more important pieces of legislation for personal injury cases. Note that this is a summary of some legislation deemed the most important; this is not an exhaustive list, nor is it a complete analysis of what this legislation might mean. Feel free to contact any one of our attorneys if you have questions or concerns about any of these or other pieces of legislation.
EXTENSION OF PRESCRIPTION FOR TORTS – HB 315 (ACT 423)
Louisiana was a state with a one-year statute of limitations (or, in Louisiana parlance, prescriptive period) on torts. Act 423, signed by Louisiana Governor Jeff Landry on June 3, doubles that time to two years. Plaintiffs will now have an extra year to file a tort action against the claimed tortfeasor, running from “the day injury or damage is sustained.”
The effective date of the act is July 1, 2024. This act is prospective only. It applies to a tort arising after the effective date. Therefore, this extension of prescription applies to torts occurring after July 1, 2024. There may be some litigation over torts committed on July 1, 2024. In any event, do not expect any changes to be felt for another year.
However, some additional actions might need to be considered by those accused of a tort. For instance, a Plaintiff claiming injury will now have two years to treat before filing suit. There is currently no mechanism in Louisiana law to force an Independent or Additional Medical Examination (IME or AME) before suit. Those with claims made against them, and their insurers, may want to consider what actions, notices, or requests to make to possibly preserve medical condition evidence and/or obtain an IME before any invasive procedures or surgeries.
We are sure there will be unanticipated fallout from this change, and we will be on the lookout for cases that arise.
LIMITATIONS ON DIRECT ACTION AGAINST INSURERS – HB 337 (ACT 275)
Louisiana was a state with a Direct Action Statute (LA R.S. 22:1268), meaning a claimant could sue the alleged tortfeasor’s insurer directly. That has been generally eliminated. Louisiana law now states the claimant “shall have no right of direct action against the insurer except in limited circumstances.”
The exceptions include:
- Insured’s bankruptcy, insolvency, or being deceased
- Inability to serve or obtain an Answer/Defense of the insured
- An action between children and parents or between married persons
- The insurer is a UM carrier
- Insurer’s defense under a reservation of rights
Given removal of the direct action, the commencement of an action now interrupts prescription (statute of limitations) for any insurer with coverage. If the insurer is sued, it is not to be listed in the case caption, and the existence of an insurer is not to be made to the jury unless provided for in Louisiana’s code of evidence. If not a proper party, the insurer may still be joined for purposes of judgment or enforcing settlement.
The new law also requires insurers denying coverage to take specific actions. This includes written notice of a reservation of rights within 90 days of the determination of a coverage defense and notice within 60 days of said reservation, but in no case less than 30 days before trial, and made to all counsel, of the reservation of rights and notice to the insured of either a refusal to defend or the provision of independent counsel at the insurer’s expense.
These new provisions should be read in their entirety by any corporate counsel. The law is effective August 1, 2024.
INSURANCE VENUE – HB 88 (ACT 595)
Louisiana’s venue rules determine in which specific state court a lawsuit should be filed. Under Louisiana’s old rules, in an action against a foreign insurance company, the lawsuit was to be filed in the 19th Judicial District for the Parish of East Baton Rouge. Act 595 amended the rules to eliminate this foreign insurer venue provision under the Code of Civil Procedure and section 1269 of the insurance code. With that change, venue is generally proper in the parish where any defendant lives or in the parish where the accident occurred. There remain some additional general venue rules which apply in specific cases. One venue rule which has not been affected is that the venue for purposes of suing an uninsured motorist insurer includes the Parish where the UM insured who is seeking to recover under her UM insurance is domiciled.
This change is in line with the elimination of Louisiana’s Direct Action Statute, and this Act is effective the same date: August 1, 2024.
SERVICE OF PROCESS – HB 21 AND HB 27 (ACTS 183 & 185)
There were a few changes to the rules for service of process/notice in a couple of very limited circumstances. HB 21 (Act 183) provided for service by commercial courier for an absent person and defines what constitutes a diligent attempt at notice by counsel appointed by the court to represent an absentee or nonresident.
HB 27 (Act 185) allows a party seeking medical records of another party in litigation to serve notice on that other party by commercial courier that medical records will be sought.
Both are effective August 1, 2024.
FAILURE OF COLLATERAL SOURCE REFORMS – HB 423 AND HB 336; SB 355 (ACT 765)
There were a few proposals for reform of Louisiana’s legislation on the collateral source rule and litigation medical financing. Unfortunately, most substantive reforms failed. This is a particular shame—if anything would have reduced Louisiana’s insurance rates in the long term, some of this proposed legislation might have.
Chief among the attempted reforms were two bills to modify LA R.S. 9:2800.27, the prior collateral source reforms dating to 2020. The piece that moved forward was HB 423, which would have limited recovery of medical expenses to the amounts actually paid by the collateral source and up to 30% of the discount. However, that “bonus” payment would not have been mandatory. Further, the legislation would have allowed evidence of both the charges andwhat was paid/discounted at trial. Exclusions for Medicaid and Workers Compensation as collateral sources would have remained, with no evidentiary changes to their charge/payment scheme. HB 423 passed both the Louisiana House of Representatives and Senate, but was unfortunately vetoed by Louisiana’s governor just before his deadline to do so.
Another bill, SB 355 passed and was signed into law as ACT 765. It provides for regulation of litigation funding by a third party that is a foreign person, state, or wealth fund and for other litigation financing disclosures. The Act requires disclosure of financing when recovery is contingent upon settlement/judgment. However, it excludes the “bills, receivables, or liens held by a healthcare provider or their assignee” and excludes loans when “repayment of the loan is not contingent upon the judgment, award, settlement, or verdict.” Frankly, this act is overly cumbersome and will do little to settle the current issues in litigation medical financing. Parties will likely still be fighting over discovery and admissibility of financing documents and evidence. The Act is effective August 1, 2024, but we consider it a failure in reform.
Two other bills entitled the “Litigation Financing Disclosure Act” (HB 336 and SB 8) both died in Senate Judiciary Commission A, likely in favor of the SB 355/Act 765.
FAILURE OF HOUSLEY REFORMS – HB 24
In April, we reported on the attempt to reform Louisiana’s Housley rule, the judicially-created presumption that a claimant is presumed to have injury/condition caused by an accident if they were free from the complained of symptoms prior to the accident. For a more in-depth discussion, see our prior reporting here. This reform was previously attempted in 2020. The new bill would have explicitly put into law that a lack of prior injury/conditions does not create a presumption that claimed injuries were caused by the accident. This would have been in line with a Plaintiff’s general duty to prove his or her claims by a preponderance of the evidence.
This bill passed the House 75-25, but died in Louisiana’s Judiciary A Senate Committee. This was another unfortunate failure of the legislature to uphold the premise that laws, not judicial opinions, are the source of law in Louisiana—as there is no written law in Louisiana stating that a Plaintiff need not prove accident-injury causation.
