Significant Upcoming Changes From Louisiana Direct Action Reform Bill

The Louisiana Legislature recently enacted legislation that significantly alters Louisiana Revised Statute §22:1269, commonly known as the Louisiana Direct Action Statute. Under the previous version of the Direct Action Statute, a tort victim injured in an accident had the right to sue both the tortfeasor and the tortfeasor's insurance carrier.

Effective August 1, 2024, Louisiana has taken away a tort victim's direct action against insurers. Act No. 275, otherwise known as the Direct Action Reform Bill, amends sections of the Direct Action Statute such that a tort victim no longer has an independent right of action against the tortfeasor's insurance carrier under most circumstances. That right of direct action will be limited to certain situations, such as when the insured declares bankruptcy, is insolvent, is a UM carrier, or the insured avoids service. If the carrier issues a reservation of rights, the tort victim would have a right of direct action, but only to