Getting the Plaintiff to Buy Down Your Exposure in Louisiana

Some insurers do not understand the situation in Louisiana regarding the power they have to force plaintiffs to stipulate or agree that their damages do not exceed particular amounts. These threshold amounts represent different consequences when breached.

In smaller courts, such as Parish Courts, Justice of the Peace Courts and City Courts, the plaintiff must decide when filing that he or she will not seek more than the jurisdictional limit of these courts. The presiding judge in these courts can never award more than specific amounts prescribed by law, ranging from three thousand dollars to twenty thousand dollars. When a plaintiff files suit in one of these courts of limited jurisdiction, the exposure to the defendant is set at that filing. The defendant and his insurer know the rules at that point and can then evaluate the case accordingly.

The District Courts in Louisiana are of unlimited jurisdiction, so that the court has unfettered discretion on the amount of damages to award in a typical personal injury case, subject only to a standard of review by an appellate court based on the "manifest error" of the judge or jury, for which they are given considerable discretion. However, a defendant has a right to have the case tried to a jury, instead of the judge. In Louisiana, savvy insurers prefer juries to judges in the vast majority of cases, because judges are primarily retired plaintiff lawyers who tend to overvalue personal injury cases. The pitfall here is that, unless properly preserved,
a defendant's right to trial by jury can go down the river, leaving the case in the hands of a judge with unlimited jurisdiction and a healthy dislike for insurance companies.

Many defense attorneys have not timely posted the jury bond required to preserve the defendant's right to trial by jury, resulting in their insurance client paying too much to settle the case. Few plaintiff lawyers and fewer defense lawyers like to try jury trials, because it requires much hard work and skill to be successful on either side. Also, trying jury trials is much more expensive than judge trials. Preserving the right to trial by jury is important in all big cases. In smaller cases where the amount in dispute is arguably $50,000.00 or less, more variables come into play, creating the possibility of forcing the plaintiff to buy down the defendant's exposure in order to get the case before a judge instead of a

A plaintiff can stipulate that his damages do not exceed $50,000.00 and prevent the defendant from getting his jury. This stipulation usually also means that the trial will be over in one day or less, greatly increasing the profits of the plaintiff lawyer. Therefore, when the quantum of damages hovers around the $50,000.00 threshold, the plaintiff lawyer begins to suggest that no judge or jury would be likely to give his client more than the threshold amount, hoping that an inexperienced claims person or attorney will agree, waive the jury and leave the plaintiff with some real upside potential in front of a liberal judge. Savvy defense counsel can begin to appeal to the plaintiff attorney's greed by insisting upon posting the jury bond. Usually, in these close cases, plaintiff attorneys will agree to buy down the defendants exposure to avoid the hard work and expense of trial by jury.

In those instances, the plaintiff is very likely to get a judgment near $50,000.00, but will then settle for less than that amount to make his recovery even easier. Victory comes in gaining control of defendant's downside risk, making a trial a palatable alternative to settlement.