Georgia is gearing up for a fundamental legal shift, as Governor Brian Kemp prepares to sign new legislation—dubbed a "tort reform" effort—aimed at putting a cap on lawsuits and the amounts juries can award. Yesterday afternoon, Kemp, alongside other state officials and industry leaders, will enact a two-part package that promises to alleviate the high-cost pressures on consumers and businesses, however, the true impact of this overhaul on insurance premiums has yet to be seen as skeptics raise their voices, citing a lack of guarantees for a reduction in rates, according to FOX 5 Atlanta.
The sweeping legislation includes Senate Bill 69, which was broadly supported in both chambers of the state legislature, requiring entities that bankroll litigation to register with the state and restricting foreign investment in lawsuits, and Senate Bill 68, which scraped through with just a single vote over the line in the House, now demanding that plaintiffs must prove property owners' knowledge of specific security risks to file suit for misconduct or injuries, reports FOX 5 Atlanta. Supporters champion the reform as a necessary step against excessive litigation driving up business costs, whereas critics fear it could curb victims' access to compensation and justice, such as in cases of elder abuse or child abuse within childcare facilities.
"Small business owners have reported that insurance premiums have increased anywhere from 30% to 100% over the last few years, costing them thousands—if not millions—just to maintain basic coverage," Kemp had stated, highlighting the strain on Georgia's economy, according to an earlier report by FOX 5 Atlanta. Yet, House Speaker Jon Burns acknowledges the uncertainty surrounding the effect on insurance rates and has therefore commissioned a legislative panel to scrutinize the practices of insurance companies, which may signal that further legislative actions are forthcoming.
On the other side of the aisle, Democratic opponents like Rep. Tanya Miller have been vocal in their criticism, arguing the lack of any genuine relief for consumers and instead suggest the so-called "reform" favors insurance companies; “The truth is, this so-called reform was never about solving a real problem. The tort reform campaign has long been run on half-truths, selective anecdotes and outright misinformation,” Miller expressed in her opposition stance, captured by The Atlanta Journal-Constitution, as she questioned the actual impact these new laws will have on the broader market's effect on insurance premiums.
Details from the new legislation shared by The Atlanta Journal-Constitution include a modification of premises liability, revisions to damage presentation in court, and the provision for bifurcated trials, with certain exceptions, particularly for victims of sex crimes, while critics like attorney Bruce Hagen lament the insurance industry's wins at the cost of individual justice, claiming that "Despite record profits, insurance companies are getting a government handout."
Paul Nair, CEO of Savi Provisions, weighed in on the issue by highlighting the predicament businesses face due to soaring insurance rates which has exacerbated challenges, particularly in areas that already lack services, stating in an interview obtained by The Atlanta Journal-Constitution, "We went to try to get liability insurance, and 15 out of the 17 refused to underwrite the insurance." The law's long-term effects may start showing over time to stabilize the market, with Chris Clark, CEO of the Georgia Chamber of Commerce, articulating the need for patience in seeing tangible results.
