(The Center Square) — In a recent report by the Archbridge Institute, Louisiana ranked last among all 50 states in fostering social mobility, pointing to deep-rooted systemic issues that hinder upward economic movement.

Louisiana's institutions and rule of law also ranked last by the Washington, D.C.-based policy group. 

"Corruption perceptions in Louisiana are and have consistently been the worst in the country. This is true for both traditional corruption like bribery and quid pro quos," the report said.

Among the many factors contributing to the state's poor rank is a lack of "a quality legal system."  Louisiana's tort system, according to the report, costs Louisiana residents $4,000 apiece or 3% of the state's gross domestic product.

Many attribute the state legal system to the disproportionately high insurance rates − particularly automotive insurance. 

A notable example is Louisiana's pure comparative negligence rule, which allows individuals to sue for damages even if they are largely responsible for their own injuries. 

This can lead to lawsuits where a person who is 99% at fault in an accident may still recover 1% of the damages. This practice not only incentivizes frivolous lawsuits but also drives up the costs of legal proceedings, contributing to high insurance premiums across the state.

"Looking at State Quality Liability Systems and Tort Costs by state reveals some interesting findings. Six of the top eight states in terms of tort costs per capita are in the bottom 15 in state quality liability systems," Archbridge wrote in a statement to The Center Square. 

Research has also shown that tort reform can lower malpractice insurance losses. Another study concluded that, "a general shift in the liability climate generated by liability reform efforts may contribute to the effect of tort reform efforts."

The Legislature is expected to propose more bills this session that give insurers a less unfavorable legal structure. Currently, House Bill 34 introduced by Rep. Brian Glorioso, R-Slidell, aim to address some of these issues by reforming how medical expenses are handled in court.

The bill would allow any party in a trial to present evidence of either the amount billed or the amount paid as the basis for a medical expense award. The bill could reduce the incentive for excessive and potentially unjust claims, ultimately leading to a more predictable and manageable legal environment.

In February, Insurance Commissioner Tim Temple told The Center Square that he is working with legislators on a package of "comprehensive legal reform" aimed at high rates of bodily injury and litigated claims.

Experts have pointed to states like Florida, which have implemented reforms to limit contingency fees, standardize medical damage lawsuits, and reduce frivolous claims.

According to the report, these changes have resulted in lower insurance premiums and more equitable legal outcomes. Implementing similar reforms in Louisiana could help reduce the financial burden on residents, making it easier for them to invest in their futures and achieve their dreams.

While tax reform can make the state more competitive, addressing the high cost of insurance is equally important, Justin Callais, the report's author and a senior economist with the Archbridge Institute, told The Center Square. 

"You can lower the tax rates, which people like, and it makes us more competitive with other states. But if you don't fix the insanely high cost of insurance, it's just going to be impossible to get anything else," Callais said. "If you save $3,000 on your income tax but end up paying $7,000 more in home and auto insurance, you're still worse off."

In the end, Louisiana's legal environment plays a significant role in shaping the opportunities available to its residents.

Tackling the artificial barriers in the system through tort reform and legal changes could create a more equitable environment, reducing costs and increasing trust in legal institutions

"Tort reform and legal reforms more broadly are perhaps what are most needed in the state. Current practices cost residents money, increase corruption, reduce trust in institutions, and increase the cost of insurance," the report said.