Louisiana Passes New Law Limiting Personal Injury Lawsuit Awards

Louisiana has passed a new law limiting how much money a plaintiff can recover from a personal injury lawsuit. Governor Landry signed Senate Bill 231 into law, which changes how damages are calculated in cases involving third-party payments, including health insurance. Governor Landry claims the legislation will increase courtroom transparency and reduce insurance premiums while also protecting the rights of those who are legitimately injured.  

The new law changes Louisiana’s “collateral source” doctrine. Prior to the new bill, jurors could consider the full amount billed by a medical provider. Under the new law, though, jurors can only consider the amount actually paid by the insurer. The intent of the bill is to remove the ability of jurors to award damages beyond amounts paid for medical treatment. The law took effect on June 30, 2025.

What Is the Collateral Source Rule?

Collateral source is a rule that prohibits the admission of evidence that a plaintiff has received compensation from some source other than the defendant. Under the collateral source rule, evidence that a plaintiff has obtained insurance, workers’ compensation, or other payment is inadmissible at trial. The rule makes it so that the defendant pays the full cost of the plaintiff’s injuries regardless of any other compensation that a plaintiff may receive. Opponents to the rule have argued that the rule results in a windfall for plaintiffs, as they get the benefit of both their own insurance and defendant payouts.

Opinions on the collateral source rule will depend on how one views personal injury lawsuits. If the goal is to punish the defendant, the collateral source rule will make it so that a jury may potentially award more to the plaintiff, regardless of the actual amount that the plaintiff may owe to medical providers.

Healthcare Costs in Litigation Are Negotiable

Healthcare bills can be negotiated, especially by most plaintiff lawyers. It is common that a plaintiff’s lawyer will recommend that a client see a doctor so that the doctor can later testify about the client/patient’s condition. Since the lawyer may be sending patients to a doctor, that doctor would likely be willing to negotiate the price of his or her services with the attorney who referred them. Thus, a medical bill may not always be the final amount that a plaintiff is required to pay; the actual bills may, in fact, be lower after the lawsuit is over.

Since healthcare costs are malleable, it is likely that a jury could still award damages beyond what is required for medical treatments. Changing the collateral source rule in Louisiana or any other state will not change the overall problem – healthcare costs have never been transparent in America. Personal injury suits are intrinsically linked to healthcare costs. As long as America’s healthcare system remains veiled in inflated costs and backroom deals, personal injury lawyers will continue to be in demand to navigate this complex system.

Do I Need the Help of a Personal Injury Attorney?

If you have sustained a personal injury through the unlawful act of another, then you should contact a personal injury attorney. A skilled personal injury lawyer near you can review the facts of your case, go over your rights and options, and represent you at hearings and in court.