AutoInsuranceIf you are a Louisiana driver, chances are you pay considerably more for auto insurance than a driver in any other state. Some Louisiana legislators believe that these high rates are not due to Louisianans being worse drivers than those from other states, but rather Louisiana’s $50,000 jury trial threshold that allows lawsuits involving claims under $50,000 to go before a judge instead of juries. Their aim this legislative session is to reduce or eliminate the current jury trial threshold and in turn make the cost of driving in Louisiana more affordable.  

In 2013, insure.com said Louisiana’s average premium was $2,699, while the national average was around $1,500. Louisiana Insurance Commissioner Jim Donelon has attributed these high rates, in part, to the fact that Louisiana has the highest jury threshold in the nation.

Most Louisiana citizens believe they have an automatic right to a trial before a jury of their peers. While that is correct in criminal cases, it is not what happens in all civil cases. Louisiana law dictates that claims under $50,000 must be decided by a judge, not a jury. The current threshold was more than doubled back in 1993 from $20,000 to its current level. The effect is that the majority of all damage claims arising from automobile accidents are tried by a single elected judge, who determines fault and sets awards.

The relationship between Louisiana’s jury threshold and insurance premiums is more anecdotal than empirical. Those who favor lower thresholds argue that elected judges are more inclined to award greater damages than a jury. And they say insurance companies respond to the higher awards by increasing premiums.

In contrast, those who favor higher jury trial thresholds argue that lowering the threshold will cause the need for more bureaucracy and more government spending by stressing the system to the point that more court personnel and court infrastructure and judges are necessary. They note that because jury trials take double or triple the time of judge trials, fewer cases (especially smaller claims) will be disposed of in a timely manner, causing court dockets to get longer.

A third contingent argues that the framers of the U.S. Constitution considered the right to a trial before a jury to be so important that they addressed it directly in the Seventh Amendment, setting the threshold at just $20. They feel that regardless of its impact on insurance premiums, the $50,000 threshold denies Louisiana citizens their fundamental right to a trial before a jury.

Efforts to reduce the jury threshold have had little traction in the Legislature in the past. This session, however, Insurance Commissioner Donelon expects a major push for tort reform, which would include lowering the jury threshold.

Until then, Louisiana will continue to find itself at the top of two unenviable lists.

Ian Macdonald has been with Jones Walker since 2009 and currently heads the law firm’s Lafayette office. He concentrates his practice in the areas of general litigation, including insurance defense, health care, and labor and employment matters.

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