Georgia’s legislative session reached a high point of intrigue last week, and the highest priority on Gov. Brian Kemp’s agenda has made it to his desk. The General Assembly passed major legislation aimed at curbing lawsuit abuse. Senate Bill 68 is a comprehensive tort reform package and is the culmination of an effort to reform Georgia’s judicial landscape that became the governor’s top priority for this year’s legislative session.
A judicial system that allows for tort abuse – such as Georgia’s, which has consistently ranked as one of the worst states for such abuses – has been shown to have negative economic consequences across several industries. These range from medical malpractice litigation’s upward pressure on the cost of healthcare to limits on food access due to insurance costs for groceries, restaurants and convenience stores. Tort costs negatively impact Georgia’s economic activity across the board, and especially in Atlanta. It was recently estimated that Georgia residents pay an annual “tort tax” of nearly $1,400.
Several lawmakers and advocates have echoed Gov. Kemp’s concerns about Georgia’s legal environment in recent years. The state has seen several high-profile instances of lawsuit abuse as well as excessive tort costs that led to interest in enacting reforms. While those who have made the push for reform recognize that liability litigation is not frivolous by definition, Georgia has been home to many infamous cases that were categorized as frivolous or predatory, and has seen verdicts that were far removed from an accurate assessment of damages or justice.
So, how does Senate Bill 68 address those concerns? For one, it limits liability on the part of property owners for crimes committed on their property. Premises liability often severely punishes business owners for crimes they had nothing to do with. These instances can lead to increases in consumer costs, business closures and the departure of insurance carriers, the effects of which are naturally felt more intensely in poorer communities. SB 68 requires plaintiffs to demonstrate that there were reasonably foreseeable security risks that were not adequately addressed by a property owner in order for the owner to be liable for damages.
SB 68 also requires a truthful calculation of damages incurred instead of inflated medical bills that plaintiffs never actually paid. These “phantom damages,” such as costs that were covered by insurance, are frequently sought by plaintiffs and one of the main drivers of disproportionately high verdicts in Georgia. In an effort to further insure the fairness of damages awarded, SB 68 also allows for bifurcated trials, meaning that juries determine liability and the amount of damages separately, focusing on one issue at a time.
The House passed an amended version of the bill 91-82, mostly along party lines. Eight Republicans voted against the bill while three Democrats voted in favor. The final vote was held last Friday with the Senate agreeing to the House substitute on similar lines. One Senate Republican voted against the bill while two Democrats voted for it.
The House substitute made a few noteworthy changes to the bill. One specific provision lawmakers sought was allowing jurors to know whether a was wearing his or her seatbelt in an auto accident, something that was previously not admissible evidence. With the House’s revision, judges have the ability to admit seatbelt evidence but are not mandated to do so. The House also added an exemption for victims of sex trafficking seeking damages against negligent property owners and managers, as well as an exemption to the bifurcation of trials for sex crimes and when the amount in controversy is less than $150,000.
While SB 68 was the most comprehensive piece of legislation on tort reform, it was not the only change advanced during the session. Senate Bill 69, a bill that seeks to limit third-party litigation funding, passed the Senate unanimously at the end of February, and an amended version was passed in the House by a vote of 98-69.
SB 69 aims for a higher level of transparency in relation to who funds lawsuits. External funders would be required to register with the Georgia Department of Banking and Finance, and funders related to foreign adversaries (such as those in a couple of publicized cases from Russia and China) would be barred from interfering with American courts.
Passing tort reform is a signature policy win for Gov. Kemp, and it comes following the expenditure of significant political capital. Georgia now joins several other states in enacting tort reforms with the hopes of ensuring both a fairer legal environment and removing barriers to economic prosperity.
