In December, Louisiana Rep. Garret Graves, a Baton Rouge Republican, introduced legislation that would make staging vehicle collisions and fraudulently claiming financial damages a federal crime. If passed, Graves anticipates the legislation would lower insurance rates for Louisiana drivers.
The proposed legislation comes on the heels of a federal investigation of a massive car accident staging ring in New Orleans which led to 40 people being charged with crimes so far and 30 convictions. The staged accident ring caused more than 100 accidents with 18-wheelers, with one staged accident alone resulting in a $4.7 million settlement.
Members of the staged-accident ring in New Orleans were prosecuted under the federal Racketeer Influenced and Corrupt Organization Act (RICO) in most cases, or mail fraud statutes in some other cases because there currently is no federal law against staging an auto accident.
Graves introduced the Highway Accident Fairness Act of 2021 on Dec. 7 in an effort to protect drivers on public roads, prevent dishonest insurance claims from being filed and help to protect supply chains and the movement of freight. The bill, which was co-sponsored by Texas Rep. Henry Cuellar (R-Laredo), was referred to the House Judiciary Committee.
Groups such as the American Trucking Association (ATA) and the Louisiana Motor Transport Association (LMTA) encouraged Graves to move forward on the bill to better protect truckers and their insurers.
“This ongoing fraud hurts drivers and specifically hurts truck drivers and trucking companies through higher insurance rates,” Renee Amar, LMTA’s executive director, told news sources in an email. “This fraud has got to be stopped, and increasing penalties and prosecuting all of the criminals, from the slammers to the doctors to the law firms, is needed to stop this criminal behavior once and for all.”
The bill, HR 6151, would help to decrease insurance rates for drivers by cracking down on false insurance claims produced by attorneys or other individuals involved in accident-staging rings, Graves said.
“Louisiana drivers pay some of the highest insurance rates in America,” Graves said in a news release issued Dec. 9. “This is unacceptable and the solutions don’t require rocket science. Our bill will prevent criminal rings from further increasing the cost to drive and do business in Louisiana.
“That one $4.7 million settlement cause d all of our insurance rates to go up. Our legislation cracks down on fraudulent claims, increases safety on the roads and will help to lower insurance rates for drivers,” Graves said.
“Highways are a significant component of our economic supply chain. Every single day, goods flow across states to get food on shelves and products in homes. We must commit ourselves to keeping these transit corridors open and safe all year round,” Cuellar said. “That is why we must pass this important legislation protecting our truckers from staged collisions that cause dangers for civilians on the road and economic problems for trucking companies providing an essential service.”
In thanking Cuellar and Graves, ATA President and CEO Chris Spear called the proposed legislation, “a common-sense bill” to curb rampant lawsuit abuse against the trucking industry.
“Staged accidents, third-party litigation financing and disproportionate nuclear verdicts are perverting civil justice into a profit center, jeopardizing highway safety and adding more costs and strain to our nation’s supply chain. This legislation would restore balance and fairness to our system and help ensure justice drives accident litigation – not profiteering and windfalls,” Spears said.
Under the terms of the bill, a person convicted of staging collisions with motor vehicles would face fines, jail time not exceeding 20 years or both. When such collisions cause serious bodily injury, imprisonment for at least 20 years would be required, along with appropriate fines, the bill states.
HR 6151 would also force disclosure of third-party litigation funding in highway accident claims. The bill would require disclosure of the names of any commercial enterprises that stand to receive a portion of any monetary relief issued during a legal settlement or court judgment.
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