Georgia Legislature Gives Checkup to Reform Bills
The Georgia Legislature is certainly getting its share of tort reform news this session, considering almost a dozen House bills dealing with civil justice reform and medical malpractice reform.
“We commend the sponsors of these bills for taking on this politically charged issue,” said Robert Herlong, Southeast regional manager of the Property Casualty Insurers Association of America (PCI).
“The state courts in Georgia are somewhat cautious when it comes to an interpretation of an insurance contract,” continued Herlong. “The industry has suffered some significant losses in court over the years. For example, we have pretty liberal case law for holding against insurers in the areas of ‘stacking’ of auto liability coverages. We also were one of the few jurisdictions to allow by judicial fiat the recovery of ‘diminished value’ in auto physical damage cases.”
Ray Farmer, assistant vice president of the Southeast region for the American Insurance Association (AIA), reported Georgia’s current tort system impacts both agents and carriers. “Looking specifically at the medical liability line, Georgia’s adverse litigation environment means there is no market for agents to write med-mal,” Farmer commented. “Currently, Georgia has one carrier (MAG Mutual) writing 75 percent of the physicians’ coverage. This is not the definition of a competitive, healthy market.”
When discussing the bills, Farmer offered: “AIA believes the following three bills realistically have the best chance of passing and could best improve the system: HB 1421, which would eliminate joint and several liability in all tort actions so a defendant would only be responsible for damages in proportion to his/her degree of fault; HB 1420, which would provide specific standards for admission of expert testimony in med-mal cases, and; HB 1342, which would prevent double payment for damages by taking into account compensation from collateral sources.”
In Herlong’s opinion, the bills having the best chance of passage at this point, “will probably be focused on the area of medical malpractice since that is the issue that has been driving the debate thus far. Unfortunately the bills that are limited to this specific area will not affect the overall tort system to an appreciable degree.”
The trial lawyers, meantime, have made sure their voices are heard. The Georgia Trial Lawyers Association is leading the opposition to the tort reform bills. “They’re using the same arguments that we have seen in other states against civil justice reform; part of their coalition is Georgia Watch, which advertises itself as a consumer group and is opposed to civil justice reform,” Julie Pulliam, AIA public affairs director for the Southeast region commented. “Both groups have testified and lobbied against the tort reform bills. There are also several trial lawyers in influential positions in the Legislature.”
Pulliam went on to say that “Georgia does not want its civil justice system to become like Alabama’s or Mississippi’s—that’s why the state’s business and insurance community has decided that now is the time for tort reform—before the situation deteriorates further. A Harris survey of corporate counsel sponsored by the U.S. Chamber in 2002 measured their perception of the fairness of state judicial systems. Georgia was #23 —in the middle of the pack.”
According to Pulliam, “In recent years, both Alabama and Mississippi have been competing for the title in the Southeast of ‘worst litigation environment.’ Alabama voters have made significant progress in recent years in replacing a heavy pro-plaintiff Supreme Court and lower courts with more conservative judges after the national spotlight was shone on the outrageous verdicts being handed down in some jurisdictions. The same thing is now happening in Mississippi— but Georgia does not want the situation to deteriorate to that point.”
Editor’s note: As Insurance Journal Southeast went to press last week, AIA reported that a recent hearing on HB 1420 and a similar bill, HR 1399, to apply certain expert witness, discovery and deposition requirements qualifications in med-mal cases, resulted in the bills reportedly being hijacked by the trial bar’s legislative supporters on the subcommittee. HR 1399 was heavily amended to make it unfavorable (in AIA’s view) and reported to the full Judiciary Committee.