Gov. Brian Kemp has unveiled a comprehensive tort reform package aimed at addressing rising litigation costs and improving transparency in the state's legal system.
The proposed reforms are designed to reduce the financial burden on businesses and individuals from excessive lawsuits while ensuring justice for those wronged.
“[O]ur legal environment is draining family bank accounts and hurting job creators of all sizes in nearly every industry in our state,” Kemp said in a press release. “After months of listening to our citizens, businesses, and stakeholders across the spectrum, it is clear the status quo is unacceptable, unsustainable, and jeopardizes our state's prosperity in the years to come.”
“This tort reform package protects the rights of all Georgians to have access to our civil justice system, and ensures that those who have been wronged receive justice and are made whole.”
Notably, the Insurance Information Institute reports that trial attorneys are increasingly targeting Georgia, with ad spending rising 38% since 2019, totaling over $160 million.
This has led to Georgia's personal auto claim litigation rate being nearly three times the national median, costing residents an estimated $880 million annually and driving up insurance premiums.
From 2014 to 2022, Georgia's auto insurance costs grew 5.6%, outpacing the national increase, with average expenditures 20% higher than the U.S. average, while the state's median income lagged 9%.
Subsequently, the tort reform package has garnered significant support from organizations like the Georgia Chamber of Commerce and the National Federation of Independent Business (NFIB), which advocates for these changes due to the impact of litigation on businesses and consumers.
“Small businesses are the backbone of Georgia’s economy, but many local businesses are struggling under the weight of excessive litigation costs,” NFIB State Director Hunter Loggins said of the tort reform package during an event at the state’s Small Business Day on Feb. 18. “Governor Kemp’s tort reform package would help Main Street businesses focus on growth, job creation, and serving their communities instead of wasting time and money fighting unfair lawsuits.”
Several tort reform bills included in the package passed a Senate committee this week.
The legislation targets key areas of Georgia's legal system.
The package includes provisions to limit medical expense damages to actual costs, aiming to prevent inflated claims. It also proposes changes to negligent security liability by limiting business responsibility to what they can control and mandates truthful medical damage calculations.
The reform seeks to end anchoring tactics, where plaintiffs' attorneys request inflated numbers, introduces bifurcated trials for clearer procedures and allows juries to consider seatbelt use in auto accident cases.
Additionally, it seeks to eliminate double attorney fee recovery, prevent case dismissals during trial and reform third-party litigation funding (TPLF).
TPLF specifically is a growing concern in Georgia, where wealthy financiers, including foreign entities, fund lawsuits in exchange for a share of the settlement or verdict.
Critics argue that this unregulated practice lacks transparency, as defendants and juries are not informed of the funding source, potentially leading to biased or manipulated outcomes.
Some worry that TPLF could pose national security risks, with foreign actors potentially using it to influence U.S. policy or steal proprietary information.
Despite these concerns, efforts to regulate TPLF, including proposed bills in Georgia and other states, have faced resistance.
In 2024, Georgia was ranked No. 4 in the American Tort Reform Association's (ATRA) annual "Judicial Hellholes" report due to ongoing lawsuit abuse and rising nuclear verdicts.
This trend costs every Georgian $1,372 annually, with Atlanta residents paying even more, and leads to significant job losses, according to ATRA.
Critics argue that Georgia's courts have become a "lawsuit lottery," encouraging excessive payouts and creating a burdensome economic climate.
Tort reform efforts often face strong opposition from trial lawyers, who have historically used their influence to support friendly politicians.
Federal campaign data from the 2024 election shows 47 Georgia-based lawyers from top trial attorney firms, including Morgan & Morgan, donated significantly to Democrat presidential candidate Kamala Harris.
This pattern has persisted for years, with the state’s trial attorneys also contributing to politicians like former Democratic Gov. Roy Barnes, who opposed tort reform measures during his tenure from 1999 to 2003.