Prepared by Gabriella R. Bowling, J.D.
The Georgia Legislature recently passed its first meaningful tort legislation in 20 years. The two new bills—SB 68 and SB 69—have not yet been signed into law by Governor Brian Kemp. However, he is expected to do so soon as both are the cornerstones of his comprehensive tort reform plan. These bills target illegitimate claims as well as excessive jury awards and litigation costs. By reducing legal uncertainty and discouraging lawsuit abuse, Georgia is ensuring that there is a fair, stable, and more predictable legal system. These long-overdue protections are game-changers that will lessen the risk of financial strains for businesses and insurers. Please note that challenges are expected to many of these changes, and the case law interpreting them may play out over several years. The following summary is not specific legal advice, but we welcome your inquiries and discussions as tort reform progresses, hopefully with positive results for businesses, insurers, and the citizens of Georgia.
Senate Bill 68
SB 68 governs civil practice. It will repeal all prior conflicting laws when Governor Kemp makes the bill effective by signing it into law. The new law in Sections 6 and 7 (which govern negligent security and collateral source payments) will only apply to causes of action that occur on or after the effective signing date. For prior causes of action, the old law applies. The new law in all other Sections (1, 2, 3, 4, 5, and 8) will apply retroactively to all currently pending cases. The key provisions are as follows:
- (Retroactive) Limits on Non-Economic Damages: Attorneys can no longer argue arbitrary dollar amounts for non-economic damages (such as pain, suffering, or loss of consortium). Any such argument must be rationally related to the evidence—not based on mere feelings. The point of this revision is so such jury awards are decided by the “enlightened conscience” of an impartial jury.
- (Retroactive) Changes to Motions: Defendants now may file a motion to dismiss or a motion for a more definite statement without having to file an answer at the same time. While the court considers the motion, an automatic 90-day discovery stay is imposed in which only limited discovery is allowed. This provision importantly allows defendants to seek the dismissal of a case before engaging in costly discovery.
- (Retroactive) Limits on Voluntary Dismissals: The time for plaintiffs to file for the voluntarily dismissal of a case has shortened. Also, while the first dismissal is “without prejudice,” so it is not a final judgment on the merits of the case, any subsequent dismissal based on or including the same claim will be “with prejudice.” So, it would be a final judgment on the merits of that cause of action. Importantly, plaintiff’s attorneys casually filing for a dismissal simply because plaintiff does not like the selected jury and then re-filing will now be discouraged.
- (Retroactive) Double Recovery of Attorney’s Fees: Unless the statute specifically authorizes the recovery of such duplicate awards, attorneys can no longer twice recover awards for the same attorney’s fees, court costs, or expenses of litigation. Importantly, this prevention of double dipping by plaintiff’s counsel will help stop the driving up of a verdict award via duplicate costs or fees. Contingency fee agreements can no longer be used as evidence of the reasonableness of the fees.
- (Retroactive) Admissibility of Seat Belt Non-Use: A party’s failure to wear a seatbelt may now be considered as admissible evidence in determining negligence, assumption of risk, comparative fault, causation, and the reduction of damages.
- (Effective Date) Negligent Security Claims: the bill adds an entirely new article to regulate negligent security claims. It applies to all causes of actions that occur on or after the day Governor Kemp signs the bill into law. This addition is quite beneficial to property owners as it adds a formal, clear structure to this highly litigated field. Although it may take years for courts to fully understand its impact, the aim is to standardize these cases.
- Under the old law, a duty was triggered when a third-party’s criminal actions were “reasonably foreseeable.” There is still such a duty, but the statute narrows the definition to be more favorable to property owners.
- This section also details how to apportion fault, specifying that unless all third-party wrongdoers are more than 50% at fault, the court must set aside the verdict and order a retrial.
- Additionally, plaintiffs cannot discuss the financial resources of any party or non-party, or the financial impact apportionment will have on awarded damages. Theoretically this prevents juries from inflating verdict amounts for desired payouts.
- (Effective Date) Medical Bill Payments (Collateral Source): this section applies to all causes of action that occur on or after the day Governor Kemp signs the bill into law. In some tort actions, evidence of a plaintiff’s public or private health insurance, including workers’ compensation benefits, may now be presented. This evidence is to determine the “reasonable value” of medically necessary care (i.e., to compare the amounts charged by medical providers and the amounts actually necessary to satisfy the charges). This is greatly beneficial as defense can use this evidence to reduce inflated awards for medical expenses.
- (Retroactive) Bifurcation of Trials: In some tort actions, any party may now elect to spit a trial into several phases. In the first phase, the trier of fact will determine which parties were at fault and apportion a percentage of fault to each. In the second phase, the trier of fact then will determine the amount of compensatory damages to award; if the trier does award compensatory damages to the plaintiff, then there is a third trial phase. In the third phase, issues regarding punitive damages, attorney’s fees, litigation expenses, etc.
- Practically, unless plaintiff’s injuries are obvious, this division shelters the jury from prejudice while determining and assigning percentages of fault. This would, however, extend the trial.
Senate Bill 69
SB 69 differs in that most of its provisions will not be effective until January 1, 2026. Some provisions will take effect on the day Governor Kemp signs it, however, as noted below. In general, SB 69 will regulate third-party litigation financing (“TPLF”) practices in Georgia. This bill is Georgia’s attempt to restrain third-party financiers’ influence and increase transparency during litigation. SB 69 sets forth several significant requirements:
- First, a person or entity engaging in TPLF in Georgia must register as a litigation financier with the Department of Banking and Finance. Also, they must provide certain information, such as any affiliations with foreign persons or principals. These filings are public records subject to disclosure.
- Second, in cases where a litigation financier provided funding, the bill restricts their influence. For example, decisions reserved only for the parties and their attorneys, such as legal representation, expert witnesses, litigation strategy, or settlement, cannot be directed by a litigation financier. Neither may a litigation financier pay referral fees or commissions in exchange for referring the consumer to the financier or otherwise accept payment for providing goods or services to a consumer.
- Third, the bill now makes the existence of a TPLF agreement and its terms and conditions discoverable in the underlying lawsuit. The disclosure of such information does not automatically make it admissible evidence at trial but does open the possibility.
- This provision will become effective on the day Governor Kemp signs SB 69 into law. However, it will only apply to cases or actions that commence on or after that effective signing day and to contracts entered into or on that day. It will not apply to currently pending cases or existing contracts.
- Fourth, the bill importantly sets specific requirements as to the form of a TPLF agreement and mandates certain disclosures about the consumer’s rights and the financier’s obligations. A financier’s violation of the SB 69’s provisions voids and renders unenforceable the TPLF contract. Willful violations of the bill’s provisions may even lead to jail time.
Fifth, the bill states that a financier may also be held “jointly and severally liable” for any award such as attorney fees or damages as well as sanctions against a consumer arising from or relating to an action or proceeding funded by the financier.
For additional information, please contact Kimberly Sheridan at ksheridan@georgia-law.com