The rising number of lawsuits in Georgia is leading to a phenomenon known as "social inflation," compelling businesses to increase their prices due to escalating liability costs. While tort reform could potentially alleviate this financial strain on Georgia consumers, some reform initiatives have been unsuccessful in the state legislature.
According to a commentary from the R Street Institute, Marc Hyden, the organization's director of state government affairs, asserted that Georgia's "flawed tort system" is negatively impacting both businesses and consumers within the state. Hyden stated that the consequence of excessive lawsuits and "outrageous nuclear verdicts" is that businesses are compelled to raise their prices. This leaves consumers bearing the cost while attorneys secure substantial payouts. He added that Georgia residents are paying a "tort tax" of approximately $1,100 annually. Hyden highlighted that tort reform initiatives have failed in the legislature, including a bill aimed at repealing the state's "seatbelt gag rule" which pertains to the admissibility of a plaintiff's seatbelt usage in car accident lawsuits. Although this measure passed Georgia's House, it did not progress beyond the Senate.
The Mercer Law Review reported that the Georgia Supreme Court has expressed concerns over a statute of the Official Code of Georgia Annotated (OCGA) which prevents defendants from presenting evidence in a civil lawsuit that a plaintiff was not wearing a seatbelt. The report indicated that during the 2022 case of Domingue v. Ford Motor Company, Georgia's Supreme Court was requested to provide clarity on the state's seatbelt statute. The court confirmed that OCGA 40-8-76.1(d) prohibits consideration of seatbelt usage; however, according to Mercer Law Review's report, it left room for challenges regarding the constitutionality of this rule. Justice Sarah Hawkins Warren said: "some of us have serious concerns about the constitutionality of a statute that strips from the defendant the ability to present evidence that could be critical to its ability to present a defense of a product it designs and manufactures."
In August 2023, Governor Brian Kemp stated that excessive lawsuits and substantial verdicts are causing insurance costs to surge, as reported by AP News. "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 during his address to the Georgia Chamber of Commerce. He further added that the burden these lawsuits impose on industries such as real estate and trucking is "unacceptable." Consumer advocates also highlight that the cost of lawsuits is often distributed among all insurance carriers, thereby increasing costs and contributing to inflation.
According to its website, the R Street Institute is a nonprofit policy research organization established in 2012. The organization aims for bipartisan solutions that promote U.S. innovation and protect individual liberty. It provides research and analysis in support of practical policy solutions.