Georgia Tort Reform Laws Bring Significant Changes

The Georgia General Assembly has passed comprehensive tort reform legislation, S.B. 68, that should interest any company operating or litigating in Georgia. In addition, the General Assembly passed S.B. 69, which regulates and requires disclosure of third party litigation funding agreements. This legislation was a top priority for Governor Brian Kemp, who is expected to sign both bills into law in April.

DETERMINING DAMAGES FOR MEDICAL EXPENSES

Expanded Admissibility. Georgia courts have applied the common law collateral source rule to bar defendants from presenting evidence of the amount health care providers were actually paid for treatment provided to plaintiffs. That exclusion limited admissible evidence to the billed or “chargemaster” rate, even when that amount was substantially more than the amount the health care provider accepted or would accept as full payment. Under S.B. 68, a court must allow a jury to consider not only “amounts charged” but also amounts “actually necessary to satisfy such charges” under public or private health insurance that covers the plaintiff, including workers’ compensation. Juries will then use this information to evaluate the reasonable value of the plaintiff’s medical treatment. This change should stem recovery of what are known as “phantom damages.”

Letters of Protection. If a plaintiff obtains treatment under a letter of protection (LOP) arrangement (in which a health care provider agrees to be paid out of the plaintiff’s settlement or judgment), S.B. 68 provides that certain information is “relevant and discoverable,” including the LOP agreement, an itemized list of the medical services provided with specific charges and billing codes, the name and dollar amount of any portion of the account receivable sold to a third party, and the identity of any individual who referred the plaintiff to the provider for treatment.

ARGUING THE VALUE OF NONECONOMIC DAMAGES

S.B. 68 amends a Georgia statute that broadly authorizes lawyers to argue the monetary value of pain and suffering to the jury. The new law permits such arguments when “rationally related to the evidence of noneconomic damages” and prohibits “reference[s] to objects or values having no rational connection to the facts proved by the evidence.” This change is intended to bar “anchoring” tactics in which attorneys, for example, refer to how much a professional sports player is paid, or the value of art or some other object, to set a baseline for an extraordinary noneconomic damage award. S.B. 68 also requires an attorney who suggests a value for noneconomic damages in a closing argument to have done so in the opening argument in the same amount.

ADMISSIBILITY OF SEATBELT NONUSE

Under current Georgia law, evidence that a person injured in an automobile accident was not wearing a seatbelt is inadmissible. S.B. 68 eliminates this statutory “gag rule” and permits a factfinder to consider seatbelt nonuse when evaluating issues such as negligence, comparative negligence, causation, assumption of risk, or apportionment of fault, or for any other purpose. The new law provides, however, that a court has discretion to exclude seatbelt non-use evidence if its probative value is outweighed by the danger of unfair prejudice.

CHANGES TO TRIAL PROCEDURES

A More Efficient Process for Seeking Dismissal. Under current Georgia law, when defendants file a motion to dismiss, they must still prepare and file an answer within 30 days, and may also have to respond to discovery requests, before the court rules on dismissal. S.B. 68 permits a defendant to file a motion to dismiss in lieu of an answer. Discovery is stayed until the court rules on the motion (except that if the court has not ruled within 90 days, a party can move the court, for good cause, to modify or end the stay). If the court denies the motion to dismiss or indicates that it will not rule until trial, the defendant must file an answer within 15 days.

An Option to Bifurcate and Streamline Trials. In any personal injury or wrongful death action, S.B. 68 permits a party to elect to have the court conduct a trial in two phases. In the first phase, a jury will determine liability and allocation of fault. If the jury finds liability, in the second phase, the same jury will decide the plaintiff’s compensatory damages. If necessary, the court would conduct a third phase to consider punitive damages. During each phase, admissible evidence would be limited to the issues before the court. A court can reject an election to bifurcate in cases in which the amount in controversy is less than $150,000 and in cases alleging injuries from sexual offenses.

Prevents Plaintiffs’ Lawyers From Dismissing and Re-filing Cases Without Consequences. Under current Georgia law, a plaintiff can unilaterally dismiss a case, without prejudice, any time before the first witness is sworn at trial. As a result, defendants may incur substantial costs in a case that a plaintiff might dismiss and re-file in another court perceived as more favorable. S.B. 68 limits a plaintiff’s ability to dismiss an action without order or permission of the court, without prejudice, to within 60 days of a defendant filing its answer. If a plaintiff previously dismissed an action based on the same claim, dismissal operates as an adjudication upon the merits.

PREMISES LIABILITY—NEGLIGENT SECURITY

S.B. 68 responds to a series of Georgia Supreme Court decisions that expanded the liability exposure of businesses should a customer or visitor become a victim of a crime on or near their premises, as well as nuclear verdicts that occurred in this area. Among its many provisions in this area, the new law: 

  • Provides that wrongful conduct by a third party is “reasonably foreseeable” only when a premises owner had “particularized warning of imminent wrongful conduct by a third person” or reasonably should have known that this wrongful conduct would occur based on actual knowledge of prior occurrences of substantially similar wrongful conduct on the premise, the adjacent premises, or within 500 yards of the premises, or by a third party who the defendant knew or should have known would be on the premises.
  • Provides that a premises owner can be held liable only if the wrongful conduct by a third person was a reasonably foreseeable consequence of that person exploiting a specific physical condition of the premises known to the owner or occupier, which created a reasonably foreseeable risk of wrongful conduct on the premises that was substantially greater than the general risk of wrongful conduct in the surrounding area. In addition, the injury must be a proximate cause of a premises owner’s failure to exercise ordinary care to remedy or mitigate a specific, known physical condition of the premises and otherwise keep the premises safe from such wrongful conduct.
  • Provides for liability to licensees in more limited circumstances than invitees (as above).
  • Precludes liability for negligent security to a trespasser, a person who was not injured on the owner’s property, a tenant or guest of a tenant who was subject to eviction proceedings, a person that came on the property for the purpose of committing certain crimes, a person injured in a single-family residence, or when the premises owner made a reasonable effort to alert law enforcement to a particular warning of imminent wrongful conduct.
  • Requires a jury to apportion fault in a negligent security action among the (1) owner or occupier; (2) any third person whose wrongful conduct caused the injury (the perpetrators of the crime); and (3) any other responsible person. The trial court must set aside a verdict that fails to apportion a reasonable degree of fault to the perpetrator of the crime and grant a new trial. S.B. 68 provides a rebuttable presumption that an apportionment of fault is unreasonable if the total percentage of fault apportioned to all perpetrators is less than the total percentage of fault assigned to all owners or occupiers, security contractors, and other persons who did not engage in the wrongful conduct.


THIRD PARTY LITIGATION FUNDING (TPLF)

Georgia enacted separate legislation, S.B. 69, responding to the increasingly common practice of third parties investing in litigation in return for a portion of the recovery. The Georgia Courts Access and Consumer Protection Act:

  • Applies to any arrangement in which a person or business provides financing to a consumer or entity, or its counsel, in exchange for a right to receive repayment that is contingent on the outcome of litigation. This covers funding provided to law firms and attorneys for litigation expenses, as well as to cash advances provided directly to plaintiffs/consumers as they await a settlement or judgment.
  • Subjects the existence, terms and conditions of litigation financing agreements to discovery. This provision does not apply to nonparties unless the agreement is for $25,000 or more in funding.
  • Requires all litigation financiers to register with the Department of Banking and Finance.
  • With respect to litigation financing by foreign entities: 
    • Requires the registration statement to identify any foreign person, foreign principal or sovereign wealth fund affiliated with the person seeking to register as a litigation financier in any capacity directly or indirectly related to such person’s litigation financing business.
    • Prohibits a litigation financier from engaging in funding that is directly or indirectly affiliated with a foreign government, person or entity that is a federally-designated foreign adversary.
    • Prohibits litigation financiers from engaging in practices that raise ethical issues and conflicts of interest, such as directing the litigation or settlement, choosing counsel or expert witnesses, offering legal advice, or participating in referral arrangements with law firms or others providing goods or services (such as medical clinics).
    • Prohibits litigation financiers from receiving a share of the recovery that is more than the amount collectively recovered by plaintiffs after the plaintiffs pay attorney’s fees and costs.
    • Requires certain contract disclosures to consumers in litigation financing agreements.
    • Prohibits any person who provides goods or services related to the litigation to a consumer from having a financial interest in litigation financing provided to the consumer.
    • Subjects litigation financiers that provide $25,000 or more in funding to joint and several liability for an award of sanctions or costs against a consumer, entity, or its legal representative.

WHEN DO THESE CHANGES TAKE EFFECT?

The comprehensive tort reform law, S.B. 68, will go into effect immediately upon Governor Kemp’s approval except that:

  • Provisions addressing negligent security claims and valuation of medical damages apply only to causes of action arising on or after the Act’s effective date.
  • The admissibility of seatbelt nonuse does not apply to pending claims, but to actions filed after the bill’s approval.

The TPLF law, S.B. 69, is effective January 1, 2026, except that TPLF agreements will be subject to discovery if the claim was filed or the contract was entered after the bill’s approval.

Shook’s Public Policy Group was directly involved in the passage of this bill. The litigation environment that led to this legislation, and the intent of the bill, is explored in depth in “Georgia’s Liability Environment and the Need for Legal Reform,” authored by Cary Silverman and published by the U.S. Chamber of Commerce Institute for Legal Reform.