Attorney Contingency Fee Bill Dies in Final Hours of Louisiana Session

June 25, 2010

As time ran out on the Louisiana legislative session, lawmakers were unable to complete a deal on a Senate Bill 731, which would have allowed the attorney general to hire outside attorneys on a contingency fee basis, according to the Property Casualty Insurers Association of America (PCI).

PCI opposed the bill, which was proposed as a strategy to provide the attorney general with the necessary legal resources to litigate against British Petroleum, as a result of the Deepwater Horizon oil spill.

PCI, which called the bill “unnecessary,” said business groups and lawsuit reform advocates opposed the measure because it would have provided incentives for personal injury lawyers to file unwarranted lawsuits against businesses and threatened economic growth.

Another trial lawyer initiative (SB 547), which sought to reinstate punitive damages in civil litigation, received increased attention this session in an effort to capitalize on concerns related to the oil spill but it also was defeated, according to PCI. In 1996, the Legislature outlawed punitive damages involving the transportation, handling or storing of hazardous substances.

Lawmakers passed SB 286, which changes the Louisiana Insurance Guaranty Association (LIGA) law by increasing the claims coverage limit from $300,000 to 500,000. Additionally, the bill provides for the overturn of a recent Louisiana Supreme Court decision finding that workers’ compensation self insurance funds are considered insurance and, therefore, the excess insurance purchased by them is considered reinsurance and not excess insurance.

Lawmakers also passed legislation addressing Chinese drywall (SB 595), which prevents insurers from cancelling or non-renewing policies based on the presence of drywall imported from China. The legislation was originally opposed by PCI but it was amended to narrow the scope of the bill and a sunset provision was added, which made it more acceptable to the insurance industry.

Source: PCI

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