The American Tort Reform Association released its annual Judicial Hellholes report this week and Georgia was in the spotlight. Likely to the dismay of many in the state, Georgia’s Supreme Court came in 3rd place for worst hellhole, just behind “California” and “New York” at number one and two (some comfort could maybe be taken that the hellhole here is not an entire state). Georgia was worse than the Philadelphia Court of Common Pleas and the Supreme Court of Pennsylvania at number four, and Cook, Madison and St. Clair Counties, Illinois at five.
“The significant deterioration of the Georgia civil justice system that took place in 2021 has propelled the “Peach State” to its highest-ever ranking on the Judicial Hellholes list,” said the report. “The Georgia Supreme Court has developed a propensity to expand liability whenever given a chance and other courts around the state are following its lead.”
The report details a number of areas or cases where ATRA feels the law is hurting businesses or the economy.
- Alston Bird LLC v Hatcher Management Holdings: The Supreme Court eliminated apportionment of fault in certain cases;
- Geico Indemnity Co. v Whiteside: The Supreme Court lowered the bar for plaintiffs bringing bad faith claims against their insurers;
- Frett v State Farm Employee Workers’ Compensation: The court also has expanded employment liability, including for workers on break;
- Cooper Tire and Rubber Company v McCall: In September, the court ruled that registering to do business in Georgia subjects an out-of-state business to lawsuits, regardless of the suit’s connection to Georgia; and,
- Roberts v Unison Behavioral Health: The court lowered the bar for providing the State with sufficient notice of a claim, meant to facilitate a settlement before a lawsuit is filed.
Additionally, the report makes the case that “nuclear verdicts” – multi-million dollar awards – are bogging down courts and businesses. The trucking industry is among the hardest hit by nuclear verdicts in Georgia – an industry in the news a lot lately. There were only four cases in 2006 with a verdict awarding more than $1 million, that jumped to 70 by 2013. From 2010-2018, the average verdict for truck crashes increased from $2.3 million to $22.3 million. Commercial insurance rates have risen at an average of 20-25% the past two year.
“It is really the smaller and mid- sized operations that feel the brunt of this. They have less financial flexibility. I think, ultimately, the ones that will not be able to afford the premiums will be the smaller, family-owned, 10-unit-and-less drivers,” said John McGlyn, director of transportation at Burns & Wilcox.
The report claims that if the legislature enacted certain lawsuit abuse reforms, residents and businesses would save more than $3 billion, supporting more than 38,000 jobs and more than $6 billion in increased economic activity. Additional revenue to the state would total nearly $300 million.
“The hidden costs of Georgia’s legal climate are hurting small business owners. Small business owners deserve a legal system that is fair for everyone, but Georgia’s Supreme Court has gradually expanded civil liability, creating an environment that favors plaintiffs at the expense of small businesses and other defendants,” said National Federation of Independent Business Georgia Director Nathan Humphrey. “Small businesses are especially vulnerable to frivolous claims and so-called ‘nuclear’ verdicts. They don’t have teams of lawyers on standby. The cost of defending itself against a single claim can break a small business, even if the claim is eventually thrown out of court.”
“Small business owners now more than ever deserve relief, and it is our hope the General Assembly will look at addressing this important issue during this upcoming session.”
To see the full report: https://www.judicialhellholes.org/hellhole/2021-2022/georgia-supreme-court/
