Georgia Governor Brian Kemp signed into law the Georgia Tort Reform Act today. The goal of the Act appears to be threefold, i.e., to:
- Address hidden costs in Georgia's current tort laws that tend to increase jury awards.
- Change procedural and substantive laws to help reduce the frequency and severity of so-called "nuclear verdicts" and ultimately
- Foster a more business-friendly climate in Georgia.
Changes to Premises Liability Laws
One of the biggest changes the Act seeks to make to Georgia's laws involves premises liability for business owners, proprietors, occupiers and security contractors. Under Georgia statutes, the duty of a proprietor to keep a premises safe for invitees extends to third-party criminal acts only when such an act is "reasonably foreseeable" to the proprietor. In recent decisions by Georgia courts, including the Georgia Supreme Court, such statutes had been interpreted to require a fact-intensive analysis of the "totality of the circumstances" including, for example, whether substantially similar crimes had taken place in the area or whether the business was located in a high crime area. Some saw this interpretation as an expansion of liability for business owners.
The Act appears to seek to clarify the wrongful conduct by a third party that may be deemed "reasonably foreseeable" for purposes of liability to attach by listing specific conditions. For example, wrongful conduct by a third party may be "reasonably foreseeable" when the property owner had a particularized warning or actual knowledge of prior similar incidents or a third party exploits a known, specific physical condition on the premises, and the owner's failure to address such conditions was the proximate cause of the injury.
The Act also seeks to preclude liability for property owners in cases involving trespassers, individuals not injured on the property, tenants or guests subject to eviction, individuals committing crimes, those injured in single-family residences, and situations where the owner made reasonable efforts to alert law enforcement about imminent wrongful conduct.
The Act further requires juries to apportion fault in negligent security cases among the property owner or occupier, the perpetrators of the crime, and any other responsible parties. If a verdict fails to reasonably apportion fault to the perpetrators, the trial court must grant a new trial. The Act establishes a rebuttable presumption that an apportionment is unreasonable if the total fault assigned to the perpetrators is less than that assigned to owners, occupiers, or others not involved in the wrongful conduct.
Phantom Damages Hidden Behind the Collateral Source Rule
Under the "collateral source rule," juries are not allowed to consider insurance payments by a medical insurer (or any other insurer) when determining compensation for medical expenses. This judicial doctrine allows plaintiffs the opportunity to potentially recover the full amount billed by health care providers even if the actual amount paid by the insurer is a lower or negotiated rate. Such a scenario can lead to so-called "phantom damages" or a windfall to a plaintiff for claimed damages not actually sustained. The Act seeks to prevent "phantom damages" by allowing juries to now consider the actual amounts paid (rather than the amounts billed) in an effort to ensure compensation is commensurate with the actual amount of damages sustained.
Letters of Protection
Letters of protection (LOPs) are agreements between a plaintiff and a health care provider through which the provider defers payment for medical services until the plaintiff secures a settlement or judgment against an alleged tortfeasor. The Act makes information related to LOPs discoverable, including the LOPs themselves and itemized medical service lists. This ensures transparency in health care provider agreements tied to settlements or judgments and damages claimed by plaintiffs.
Noneconomic Damages Must Be Rationally Related
So-called "nuclear verdicts" have become an area of concern for businesses. Some say that "anchoring" tactics used to ask for noneconomic damages contribute to artificially inflated awards. "Anchoring" is when a plaintiff's claimed noneconomic damages are compared with, for example, a professional athlete or performer.
Moving forward, the Act requires lawyers to ensure that arguments for noneconomic damages are rationally related to evidence. It appears this portion of the Act is an effort to try and reduce the size of verdicts entered against defendants in Georgia and curb the number of "nuclear verdicts" in an effort to promote investment in Georgia by businesses.
Admissibility of Seatbelt Nonuse
Under Georgia's rules of evidence, the failure of an
occupant of a motor vehicle to wear a seatbelt is inadmissible at
trial to establish negligence, causation, or any other question of
liability or damages. The Act changes this to now allow evidence of
seatbelt nonuse in negligence and fault assessments. Moving
forward, juries may apportion fault to plaintiffs in car crash
cases to the extent the nonuse of a seatbelt may have contributed
to the incident or plaintiff's damages.
Trial Procedures and Dismissals
Prior to the Act, plaintiffs could file suit and dismiss it without prejudice at any time up until the swearing of the first witness at trial and then re-file suit within six months even if the statute of limitations had since passed. The Act now limits a plaintiff's ability to dismiss and re-file cases without court permission.
Prior to the Act, defendants who filed a motion to dismiss a complaint were still required to file an answer. The Act allows defendants to now file motions to dismiss without simultaneously filing an answer.
The goal of these changes appears to be to reduce unnecessary litigation costs.
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