On March 18, 2024, the Georgia Legislature enacted significant amendments to the Direct-Action Statute through Senate Bill 426. This bill aims to restrict when plaintiffs can directly assert claims against insurers of motor carriers. It passed with near-unanimous support in both chambers and was signed into law by Governor Kemp on May 6, 2024. The new law applies to any actions accruing on or after July 1, 2024. Actions based on events occurring before this date will still follow the previous statutory framework.
Previously, plaintiffs had a right of direct action against the motor carrier's insurer when a plaintiff was injured in an accident caused by a commercial driver working for a trucking company. This often led juries to award larger verdicts due to the awareness of insurance involvement. Senate Bill 426 amended O.C.G.A. § 40-1-112 and O.C.G.A. § 40-2-140 to limit the situations in which the insurer can be named directly. Now, plaintiffs may only name an insurer when one or more of the motor carriers related to the cause of action are insolvent or bankrupt, or when personal service cannot be made against the driver or the motor carrier. If one of these situations occurs, the plaintiff may join the insurer as a matter of right without needing a court order before filing an amended complaint naming the insurer.
The bill received bipartisan support. State Senator Larry Walker III (R-Perry) emphasized that the legislation protects Georgia businesses by curbing frivolous lawsuits that increase insurance costs and hinder economic growth. Representative Teddy Reese (D-Columbus) praised the bill as a well-balanced compromise that is workable for lawyers. Senator Blake Tillery (R-Vidalia) highlighted the bill's potential to regulate, stabilize, and reduce insurance rates. Lt. Governor Burt Jones stressed the necessity of the bill for providing relief to Georgia's business community and ensuring fairness in courtrooms.
Overall, Senate Bill 426 represents a significant legislative effort to balance the interests of businesses with the legal framework governing motor carrier insurance claims in Georgia.
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