Left unfixed, Georgia’s lawsuit abuse is just another tax on consumers
The impact from frivolous lawsuits and Georgia’s flawed tort system is reaching a dangerous tipping point—leaving everyday consumers to ultimately foot the bill and companies in a lurch. In fact, the Americans for Tort Reform Foundation recently ranked Georgia as the country’s number one “judicial hellhole”—an embarrassing honor to say the least.
“Georgia replaced California on the top of this year’s list thanks in no small part to a massive $1.7 billion nuclear verdict that can charitably be called concerning,” explains the tort reform organization. “Georgia state courts issue some of the country’s largest nuclear verdicts [verdicts over $10 million] in state and superior courts, as personal injury lawyers cash in on plaintiff-friendly judges that benefit greatly from trial lawyer campaign contributions.”
While this issue has been spiraling for years, efforts to rein in lawsuit abuse in Georgia have languished. Even the most common sense reforms have gone down in dramatic flames in the Georgia General Assembly.
Early this year, a bipartisan coalition of state senators pushed a measure to repeal Georgia’s unique seatbelt gag rule. Sponsored by Sen. Ben Watson, R-Savannah, it would have allowed juries to consider whether a plaintiff was wearing a seatbelt when apportioning damages in auto accident lawsuits, and why not? It’s important for juries to know all of the facts, and this would have brought Georgia in line with other states. Unfortunately, the measure died on the Senate floor.
This was just one in a line of failed tort reform measures, but Gov. Brian Kemp has had enough. “The laws on our books make it too easy to bring frivolous lawsuits against Georgia business owners which drive up the price of insurance and stop new, good-paying jobs from ever coming to communities that need them the most,” Kemp said at a Chamber of Commerce meeting. “Local trucking companies either can’t afford the insurance they’re offered, or can’t find a carrier altogether, and business owners live in fear of being sued for ridiculous claims on their property”
Some experts call this phenomenon “social inflation.” The costs of defending against a deluge of frivolous lawsuits or paying outrageous nuclear verdicts takes a financial toll on companies. In order to stay in business, they must raise their prices—forcing consumers like you and me to pay the price for our broken tort system. This is essentially a tax by another name. Some estimates suggest that Georgians pay a $1,100 a year “tort tax,” which goes to cover these costs.
Some members of the General Assembly may have balked at curtailing lawsuit abuse, but Kemp has vowed to forge ahead. He recently announced, “Next legislative session, I look forward to working with members of the General Assembly on legislation that provides much needed relief to countless small businesses and job creators, reduces insurance premiums for hardworking Georgians and their families, and treats both plaintiffs and defendants fair!”
Kemp is also flanked by new allies. A political group—called Hardworking Georgians—has formed to support tort reform, and they are planning a six-figure media blitz to educate Georgians on our broken system’s impact.
It isn’t entirely clear what specific solutions the Legislature may consider, but there are some hints. Georgia Chamber of Commerce President and CEO Chris Clark stated his organization’s main legislative goals for 2024: addressing “premises liability” and “direct action.” The former allows plaintiffs to sue property owners for crimes that occurred on their premises, even if they didn’t perpetrate the crime, and the latter incentivizes plaintiffs to sue insurers, rather than the insured party who is accused of causing damages.
Both of these policies have led to our toxic legal environment and merit honest consideration in the Legislature, but there may be more tort reform bills than just these. I wouldn’t be surprised if the seatbelt gag rule returns as a topic of debate.
One issue that hasn’t gained much attention—but should—is anchoring. “It is the process by which plaintiff attorneys ask juries for judgments that are far beyond what have normally been considered reasonable,” I wrote in a previous column. Once a plaintiff attorney plants this seed, juries are more likely to deliver unprecedented verdicts. Studies have shown that anchoring results in verdicts being inflated by about 80 percent over what is deemed reasonable.
While it is critical that plaintiffs get a fair shake in court, Georgia’s system seems tilted against defendants, but they aren’t the only losers in this system. Georgians and Georgia companies who absorb the costs are too. Kemp loves to say, “Georgia is the best place to live, work, and raise a family” and recently announced that the Peach State was ranked the best place for business for the 10th straight year. With an exploding “tort tax,” it’s not clear how long Georgia can hold onto those accolades.