By Isha Marathe

March 24 - (The Insurer) - The Georgia State House of Representatives passed SB 68, the first part of Governor Brian Kemp's tort reform package which draws stricter parameters around the language plaintiffs' counsel can use to argue non-economic damages, when consumers can sue businesses, and which evidence can be submitted in discovery.

The legislation, which passed the state House on March 20 by a 91-82 vote, and the Senate on March 21 with a 34-21 vote, is now heading to Kemp's desk for final approval. The bill accommodated carveouts for sex trafficking victims after an outcry from victims' rights groups.

Kemp, who crafted the omnibus bill, is expected to sign it.

In a letter to the Georgia House panel on March 7, he said "(it) is my hope that our work together will continue to be guided by thoughtful deliberation, free from emotional exploitation and mindful of the financial motivations present on both sides of this important debate."

Bill proponents, including business groups, insurers and insurance trades, said the legislation will curb what they see as legal system abuse by plaintiffs leading to outsized verdicts, drawn-out litigation and a hostile environment for businesses.

They consider these practices to have led to higher insurance premiums across personal auto insurance and homeowners lines, landing Georgia fourth place on the "judicial hell-hole" 2024 list assembled by the American Tort Reform Foundation.

A study by U.S. Chamber of Commerce, from 2013 to 2022, Georgia had the fourth most nuclear verdicts, which are awards of $10 million or more, in personal injury litigation on a per capita basis with 64 such verdicts, according to ATRF.

The American Property Casualty Insurance Association praised the passage of SB 68, and Kemp's efforts at reforming the state's legal system.

“Over time, SB 68’s reforms can help address the costs imposed by legal system abuse in Georgia which have a direct impact on the pocketbooks of Georgians," APCIA said.

"We have seen the positive impact of Florida’s 2022-2023 legal system abuse reforms as their litigation environment improves and insurance rates stabilize, with major auto insurers recently filing for rate reductions and homeowners insurance costs slightly declining at the end of 2024."

Skyward Specialty chairman and CEO Andrew Robinson also welcomed the passage of the reform, saying in a LinkedIn post: "Finally! While not perfect, this Georgia legislation is a BIG step forward. Let's help other states engage in passing similar sensible legislation."

Opponents of the bill, who are split along partisan lines with most Republicans for it, and Democrats largely against it, said at the floor debate that the bill shields businesses from facing liability, skirting a day in court, and questioning whether insurers would even lower rates in response to legal reform.

Georgia State Rep. and Minority House Caucus Chair, Tanya Miller, called the bill a "sham" at the debate.

“Last year, we were fine... we were lamenting the fact that we were the ‘number one place to do business.’ But this year, my God, we are crushed and overwhelmed by an emergency in our judicial system? It is a lie, it has proven to be a lie.”

“Since the 1990s they’ve been saying jackpot verdicts, Juries are out of control. Businesses are closing, doctors fleeing the state. Every time the campaign is run the same way, with the same talking points, the same manufactured crisis.”

LITIGATION IN GEORGIA

Georgia's personal auto expenditures have risen disproportionately to other states, according to an analysis by the Insurance Research Council and the Insurance Information Institute (Triple-I).

By 2022, average personal auto expenditures were $1,347 in Georgia, about 20% higher than the U.S. average, while Georgia’s median household income for 2022 was approximately 9% lower than the U.S. average. As a result, Georgia was ranked as the 47th least affordable state for personal auto insurance in 2022, Tiple-I said.

The state has also experienced 38 weather disaster events in the period between 2019 and 2023, with losses exceeding $1 billion each. In 2023, Georgia was affected by 14 separate billion-dollar-plus weather events, potentially raising insurance rates to the point that homeowners depart for more lenient jurisdictions, Triple-I said.

In February, Triple-I launched a legal abuse awareness campaign in Metro Atlanta.

“There must be more work done to curb legal system abuse in Georgia, as insurers are seeing significant increases in claims costs when billboard attorneys enter into the picture,” said Sean Kevelighan, Triple-I CEO.

”Understanding how these trends drive up costs and identifying policy levers for tort reform legislation can ultimately bring positive outcomes for Georgia’s economy and its consumers and business owners.”