Kemp’s bill to curb civil lawsuits is headed to his desk

“I’m very satisfied,” Kemp told reporters Friday. “This has been worked on for years now to little avail. We have a great bill here in my opinion. Political capital, all that other stuff, I don’t have time to worry about all of that. This has been an issue that everyone in this building has worked hard on, even the people who voted against it. I disagree with some of them, but they did what they thought was right.”

SB 68 has been among the most extensively debated and complex bills this session. 

Supporters like House Speaker Jon Burns say the overhaul will reign in big payouts from civil lawsuits, which they say are fueling high insurance premiums and suffocating businesses and doctors.

“From trucking companies, pharmacies, landscapers, medical professionals, grocers, loggers, the consensus has been overwhelmingly clear,” Burns told reporters Thursday.

But the House vote by such a slim margin illustrated that there was not a consensus among lawmakers. Ultimately, eight Republicans voted against the legislation, and three Democrats voted yes. Several lawmakers did not vote. One more no vote would have defeated the bill. 

The Senate, which first passed the legislation last month, needed to sign off on the final version after changes were made in the House to win passage. In the Senate, the bill advanced with a more comfortable margin, after key Republican holdouts, all trial lawyers, got on board last month.

Opponents say the changes will do nothing to bring down the cost of insurance and will limit access to the civil justice system and trial by jury. 

“I want you to frame this discussion today, my colleagues, understanding what we are tinkering with,” Democratic Rep. Tanya Miller said Thursday on the House floor. “This is an attack on the very fundamental premise that makes this country what it is.” 

After the House vote, Burns announced plans to convene a study committee on insurance reform next year.

All but two provisions of SB 68 take effect when Kemp signs the bill and apply to cases already underway.

Here is a look at why the debate is so controversial and what the 19-page bill does:

Presenting noneconomic damages

OK, so you have heard this debate could have implications for any Georgian, and you decide you want to get engaged in the debate and learn more about what is being proposed. 

But read the text of the bill, and it’s easy to get lost by page two. That’s because the first few sections deal with specific rules of civil procedure. If you’re not a lawyer, this can get in the weeds very quickly. 

One change restricts discussing the value of noneconomic damages, like pain and suffering, until later in the closing arguments. Proponents of this change say figures can be inflated or arbitrary and discussing these numbers early in a trial can bias the jury.

Stay of discovery

Another change creates new avenues to delay discovery in specific situations. Discovery is when parties exchange information about the evidence and witnesses they plan to present at trial. 

Bill proponents say this prevents an expensive discovery process while a judge is considering whether a case can go forward.

“This will provide a deterrent for frivolous cases racking up unnecessary legal fees,” says Senate Pro Tempore John Kennedy, the legislation’s lead sponsor who has been presenting the bill in committee.

But opponents say this gives the defense an avenue to delay.

“That’s the way insurance companies make money,” attorney Josh Carroll testified in February. “You hold onto the money just a little bit longer. And this plays right into that playbook.”

Voluntary dismissal

Another provision focuses on when plaintiffs move to voluntarily dismiss a case with the intent of filing it again later. This legislation limits the timeframe when that’s allowed. 

Kennedy says current law allows plaintiffs to move to dismiss their own case so they can “cherry pick” a more favorable jurisdiction, even after defendants have already spent resources preparing for trial.

“This bill ensures that once a plaintiff starts a case, it simply gets resolved,” Kennedy says.

But plaintiffs’ attorneys say this procedural move already has limits. For example, voluntary dismissal can only be done once. Attorney Lindsey Macon says sometimes attorneys learn new information during discovery, which can lead them to additional witnesses or change the focus of the suit.

“We’re dealing with a scenario where we have the benefit of new information or we’re faced with a trial date and something that is a critical piece of evidence from a witness is not going to be there, and yet we’re going to have to stand up and meet our burden at trial,” she told lawmakers.

Recovering attorneys fees multiple times

Generally plaintiffs and defendants are responsible for paying their own attorney fees, but provisions in Georgia law provide ways for parties to recover legal fees in certain situations. 

“We’ve had some attorneys that have used multiple statutes to make claims for multiple recoveries of their same attorneys fees,” Kennedy says. “That’s simply wrong. It’s not supposed to work that way. This is one of the many things that’s driving up the overall costs that everyone is paying.”

This measure would only allow attorney fees to be awarded only once.

Allow seat belt use as evidence

Under current law, whether or not someone in a car wreck was wearing a seat belt is not considered admissible evidence in a tort case. SB 68 would change that.

Attorney Drew Ashby says this revision may seem like a no-brainer. But he told lawmakers that sharing whether or not someone wore a seat belt can bias the jury. He also says it will extend litigation and increase legal costs because it can be difficult to prove whether someone was wearing a seat belt.

But bill supporters say jurors cannot address the extent of negligence without this information.

“If someone decides not to wear a seat belt, they violate Georgia law by doing so and consciously decide to put themselves at risk of injury, why shouldn’t the jury know about that?” Kennedy says.

A revision to the bill makes clear that the judge has the option to admit seat belt use, but it is not required.

Raises standard for negligent security cases

This provision narrows when a property owner can be held liable for harm caused by foreseeable criminal activity around the premises by a third party exploiting a physical condition of the property.

For example, what happens if a shooting takes place near a gas station, an armed robbery occurs at a shopping mall or women are trafficked at a hotel? When should the owner of the gas station, the shopping mall or the hotel be held responsible?

“This bill seeks to put some standards in the law so owners know what they need to do,” Kennedy says. 

Georgia-based companies like Waffle House and RaceTrac have highlighted this provision as a top priority, saying that even when they take reasonable steps to prevent criminal activity at their restaurants or convenience stores, they can still end up on the hook for harm committed by others.

“Twenty percent of our restaurants are in Georgia,” John Fervier, vice president for risk management at Waffle House, told lawmakers. “Eighty-three percent of our legal costs are in Georgia. Georgia costs 10 times more than Texas, 21 times more than South Carolina and 89 times more than North Carolina.” 

But plaintiffs’ attorneys say this legislation raises the standard so high it would make it very difficult to bring any negligent security case. Attorney Mike Moran called this proposal a “sea change,” telling lawmakers, “This statute is so complicated that I can’t think of a single case that would get past it.”

Victims of sexual assault and trafficking organized to push back forcefully on this provision, saying it would preclude survivors from accessing the civil justice system.

“If you pass this bill as it is, you are telling every trafficker, every hotel manager who ignored the bruises, every maid who emptied the trash can filled with condoms and every business owner who profited from our captivity, that their silence is acceptable,” Michal Roseberry, who was trafficked at a hotel, said at a press conference with other survivors and family members.

Among the concessions made this week is language sharpening a carve-out for sex trafficking survivors, though Democrats say this does not go far enough.

“What is the rationale for treating victims of sex trafficking differently than other crime victims,” Democratic Rep. Stacey Evans asked before the updated bill advanced out of committee.

“I think it’s because of the primacy we place upon the uniqueness of their plight,” responded Republican Rep. Rob Leverett, who explained the changes to the bill. “Frankly, I’m just trying to listen to the testimony we heard.”

How medical damages are presented

Calculating medical expenses seems like it should be pretty straightforward. After all, you’re dealing with hard numbers, not subjective definitions or procedures. But how this should be done has been among the most contested sections of the bill.

When determining medical damages for an insured patient, there are generally three figures involved: 

(1) What the provider initially invoiced (e.g. $10,000)

(2) What negotiated rate the insurance company actually paid the provider (e.g. $7,000)

(3) What the patient paid the provider out of pocket (e.g.: $500 co-pay)

Under current law, medical damages could include the full $10,000, even though the patient and their insurance company together paid only $7,500. 

Proponents of curbing big civil litigation payouts call the difference between “phantom damages.” The current version of the bill would allow jurors to see that breakdown when determining medical damages, but would not prevent awarding the amount of the initial invoice as the original draft of the bill did. 

“The purpose of special damages is to reimburse for the actual cost, every dollar that’s owed, not a dollar more, not a dollar less,” Kennedy says.

But opponents argue this change violates a longstanding legal principle called the collateral source rule, which says liable parties should be held responsible for the full harm they caused. 

“The actual cost of the harm caused is the bill that is sent to you by the healthcare provider. That is a bonafide and legitimate bill,” attorney Jason Branch testified in committee. “The bills that healthcare providers send are not fictitious, they’re not phantom, they’re not figments of people’s imagination.”

Opponents also say this change would result in people who are the most responsible and get the best insurance recovering less in medical damages than people with no insurance at all. Kennedy says this criticism has been addressed by adding a mechanism for plaintiffs to recoup insurance premiums.

Splitting trials into multiple parts

This provision would require a jury to decide first whether a defendant is liable before determining damages. Supporters say discussing damages before establishing liability can prejudice the jury in favor of the plaintiffs once they start hearing about expensive medical bills and other expenses.

“This is simply not fair to a defendant, who should be judged on their actions and be found at fault or not at fault, but not be judged on how sympathetic a jury may want to be to an injured plaintiff,” Kennedy says.

But opponents say judges can already choose to bifurcate trials and do so if there is a good reason. They also say that mandating bifurcation undercuts judges’ discretion to manage their own courtroom and can result in witnesses having to testify multiple times. Survivors of sexual assault and other traumatic experiences have been among the sharpest critics of bifurcating trials.

Kemp agreed to a revision that would give judges discretion to avoid this in some cases of sexual abuse involving minors and in cases considering damages under $150,000. 

But Democrats and other opponents say this change does not go far enough.

Regulating third-party litigation financing

Most of the push to overhaul civil litigation rules has attracted sharp debate. But a companion bill to the larger package, SB 69, sailed through the Senate with unanimous support. That bill narrowly addresses when plaintiffs contract with a third-party firm to help fund their lawsuit. 

Litigation financiers would be prohibited from making any decisions about the course of the lawsuit or recovering any fees greater than what the plaintiffs recover from their suit. The bill also prohibits financiers affiliated with people and governments designated as foreign adversaries. 

“This bill in no way is aimed at removing the ability of plaintiffs to engage in litigation financing,” Kennedy said. “It is purely ensuring that plaintiffs are not taken advantage of by bad actors to exploit the tragedy of others.”

Why Kemp and his allies want to overhaul civil litigation rules

Kemp argues that big payouts from civil lawsuits are fueling expensive insurance premiums for Georgia businesses, medical providers, drivers and patients.

“In the last five years, company revenues have grown 21 percent,” Lanny Allgood, who owns a Georgia pest control company with a fleet of 100 vehicles, told lawmakers in February. “Auto liability coverage has doubled and umbrella coverage has quadrupled.” 

At a press conference, Haley Bower-Frank, whose family business Clipper Petroleum operates about two dozen convenience stores in North Georgia, says her company has faced frivolous and expensive suits.

“We are having to make tough decisions to close during inclement ice for fear of slip and fall, even after adequately deicing sidewalks,” Bower-Frank said. “There are times we have to decide: do we serve the public or protect our company during weather events?”

Van Laskosky, the CEO of Stephens County Hospital, told lawmakers that his small, rural hospital recently had to close its OB-GYN clinic. Laskosky attributes that in part to costly malpractice insurance making it harder to recruit OBGYNs.

“That’s a lot of risk and liability to absorb that’s going to follow you through the remainder of your career,” he told lawmakers.

Why curbing civil litigation is controversial

Opponents of the overhaul say it limits access to the civil justice system for victims of accidents, medical malpractice, abuse and other types of harm. 

Democrats have also called the push a corporate giveaway that will do nothing to lower or stabilize rising insurance premiums, like for auto insurance.

“There’s like eight factors that cause it to go up, including higher accident rates, more drivers on the road, lots of distracted driving, cars that are more expensive to fix,” Democratic Sen. Elena Parent said during a hearing. 

Joanne Doroshow, executive director of the advocacy group Americans for Insurance Reform, testified that her organization has studied insurance data going back to the 1990s.

“There is no correlation between the enactment of tort reform and insurance rates,” Doroshow said, adding that the overhaul would also be unlikely to help retain and recruit OBGYNs and other doctors.

“There are a lot of reasons we have physician shortages,” she said. “It has to do with the burdens, burnout, the difficulties of dealing with the healthcare system.” 

Insurance Commissioner John King, a Republican who is backing the bill, made this acknowledgement. 

“A lot of people ask me, well can you guarantee the rates will drop? No,” King told lawmakers in February. “But I can guarantee you they will go up if we don’t do something about it.”