A tort reform group designed to protect business interests ranks the Georgia Supreme Court among the worst offenders in 2021 after court decisions expanded civil liability against businesses. Stanley Dunlap/Georgia Recorder
When a Georgia woman didn’t notify her insurance provider about a lawsuit filed against her for hitting a bicyclist with her car, the insurer ended up on the hook for $3 million anyway.
In April, the Georgia Supreme Court ruled that although the policyholder was required to provide notice, the insurer should have anticipated that an unreliable and bad driver might not alert the company.
The case is being highlighted now as one of the reasons the American Tort Reform Association, which lobbies on behalf of corporate civil liability interests, ranked Georgia’s Supreme Court as the third worst “judicial hellhole” in the country for 2021. The group is advocating for new state legislation it claims could save residents and businesses billions.
The association lambasted state Supreme Court rulings it says have eliminated the ability to spread the blame – and damages – among multiple parties in certain cases and increased “bad faith” liability for insurance companies.
“The decline of Georgia’s civil justice system is somewhat surprising and disheartening,” the association’s president, Tiger Joyce, said. “The state was on the Judicial Hellholes Watch List for a number of years, and the Legislature has made some attempts at improvement, but sadly the Supreme Court has continued to make decisions that expand liability and create a toxic environment for small businesses.”
Republican lawmakers have pushed business-friendly tort bills in recent sessions, with mixed success. It remains to be seen if any new push will gain traction when legislators return to the Gold Dome next month.
Timothy Lytton, a law professor at Georgia State University, said that while the tort association is rightly concerned about the potential cost of business, it also ignores important factors on the other end.
“The association does not take into account at all the cost associated with accidents that could have been prevented like personal injury, or the need to increase police protection because stores are not properly putting enough security guards on their premises.” Lytton said. “I think it’s very hard to know from the judicial hellholes report whether or not these cases have been unbalanced, been good or bad economically for Georgia because the report doesn’t take into account any of the benefits of preventing injuries.”
Georgia is a regular fixture on the tort association’s naughty list, said Democratic state Sen. Elena Parent of Atlanta, who shrugged off the group’s criticism.
“This has been a constant refrain from this organization and there are bills filed to restrict access to the civil justice system every year,” said the business attorney. “They are usually defeated, because many legislators recognize that Georgia is considered a great place to do business.”
Some key so-called tort reform legislation has moved through the Legislature over the last decade or so under GOP-leadership, including a 2005 Tort Reform Act, and a bill capping medical malpractice pain-and-suffering awards that ended up in a court battle.
In the last couple of years, legislation that would have limited damages in cases such as product liability stalled despite strong support from some Republican lawmakers who regularly file tort bills.
Last year, Senate Bill 415 failed to make it through during a session cut short by the pandemic. At the time, the measure had the backing of influential Republicans who said the bill was needed to stave off the lucrative jury verdicts that hurt businesses and consumers.
Proponents of business-friendly tort legislation, however, scored a victory last year with the passage of a bill shielding companies from legal liability for COVID-19 cases unless they prove “gross negligence, willful and wanton misconduct, reckless infliction of harm, or intentional infliction of harm.”
Meanwhile, lawmakers have also created a state business court that opened in 2020 and helps resolve issues such as business contracts disputes and certain liability cases.
Despite the fact that fewer cases went to trial following the pandemic, the report claims Georgia continues to have a poor reputation for its number of verdicts over $1 million, and it raises concern about the role of third-party litigation financing in courtroom proceedings.
The report highlighted a case this year where a Rabun County jury awarded $200 million to the parents of a 7-year-old boy who died in a 2014 boating accident. The attorney representing the parents, who had rented a boat, said they wanted to send a message to the boating industry that safety must be taken more seriously.
Even though civil liability increases the costs businesses incur to implement certain practices, it is also the reason why grocery stores will quickly clean up spilled beverages so that customers aren’t injured, Lytton said.
While some settlements may seem extreme, jurors must also account for potential longer-term costs that the victim faces, Lytton said.
Lytton also criticized the tort reform association for portraying the justices as being overwhelmingly unfair toward businesses.
A Supreme Court spokeswoman declined to comment on the report.
“There’s a case where the Georgia Supreme Court actually did something that is usually associated with a fairly conservative approach to deciding cases and that is they looked at the strict textual language of the statute” Lytton said. “And on that basis, they said the provisions that limited the liability of the corporation actually did not include the current case because of their strict interpretation of the text.”
That case, Alston Bird LLC v. Hatcher Management Holdings, is considered by the tort reform organization as the most significant decision in its 20 years of reports after the Supreme Court ruled that a business or individual can be required to pay the full damages awarded if it is the only one sued, regardless of whether others caused it.
“The Georgia General Assembly can clarify the statute to address the court’s ruling and the absurd result that the ability of a jury to allocate fault among responsible parties depends on how many defendants a plaintiff names in a complaint,” the report said.
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