Move to End Georgia’s Direct-Action Lawsuits vs. Trucking Insurers Gaining Steam

January 31, 2024 by

This year could be the year that Georgia joins most other states and repeals its direct-action law that has reportedly caused severe problems for trucking companies needing liability insurance.

Several Georgia Republican legislative leaders and the state’s insurance commissioner said they are behind bills that would limit lawsuits filed by those injured in trucking-involved accidents. For years, injured motorists have been able to sue truckers’ insurance companies directly, which has led to large verdicts and settlements and has prompted many insurers to raise rates or curtail coverage in the state, said Bryce Rawson, assistant to Georgia Insurance Commissioner John King.

“It has destroyed our market. No one wants to insure trucking here,” Rawson said. “And 87% of trucking companies in Georgia are small businesses, with fewer than five employees.”

The Atlanta Journal-Constitution newspaper reported Tuesday that state Senate leaders are backing the Senate bill, SB 426. Lawmakers and the governor late last year talked about a comprehensive tort-reform effort, perhaps similar to one passed in Florida in 2023. But Gov. Brian Kemp recently said such an effort could take at least a year to accomplish.

The Senate trucking bill would allow exceptions to the direct-action ban, such as when a trucking company enters bankruptcy or when trucking company officials cannot be served with court papers. Sen. Blake Tillery, chair of the Senate Appropriations Committee, is the lead sponsor.

The House bill, HB 271, does not provide exceptions. It simply strikes the current statutory wording that reads: “It shall be permissible under this part for any person having a cause of action arising under this part to join in the same action the motor carrier and the insurance carrier, whether arising in tort or contract.”

Neither bill has seen a committee vote so far in the session that began Jan. 8 and ends in late March.

A similar bill was approved by a Senate committee in 2023 but failed to advance.

“Georgia is one of only four states left that still allows plaintiffs’ attorneys to seek damages from the actual insurance carrier,” the bill’s chief sponsor, Sen. Shawn Still, R-Norcross, said at a committee hearing in 2023.

The current law, penned in 1937, came about as a way to allow injured parties to be made whole if the trucking company owner or operator could not be located. But transport companies and insurers have said the law is unnecessary in today’s online world, where truckers can be tracked down.

Plaintiffs attorneys have opposed the changes and have said the current law does not force insurers to pay higher damages than policy limits allow.