
Gov. Brian Kemp delivered his penultimate State of the State address last week with the usual list of goals and priorities he’ll pursue over the next few months. But he also included an unusual, not-so-thinly-veiled threat: a special session later this year if lawmakers don’t act on his top priority of reining in abusive lawsuits.
As Kemp enters his home stretch as governor, he can point to progress on multiple fronts. He can claim a healthy record of employment growth, unprecedented budget surpluses that have driven tax rates lower (including another, just-announced tax cut) and moves to protect Georgia’s right-to-work status.
But Georgia’s legal environment has deteriorated to the point that it threatens all the other good work policy makers have done over the decades.
“It’s abundantly clear,” Kemp said, “that the status quo isn’t working and a failure to act on meaningful tort reform will continue to put Georgians and their livelihoods in serious jeopardy.”
Kemp devoted more than a third of his speech to the topic. He recounted stories from the trio of roundtable meetings he held across the state in recent months with employers large and small. Say what you will about Kemp, but he has not been a governor who picks fights unnecessarily. This fight appears to be another born of conviction based on what he has seen and heard from Georgians.
Lawsuit abuse is a topic that grows more complex the more you delve into it. It has many facets. Some of them only directly affect individual industries, while others cut across many. Kemp has not yet specified which avenues he plans to pursue, but he’s expected to reveal these plans within days.
A superficial summary of this fight would be a brawl between Big Law and Big Business, trial lawyers vs. insurance companies. However, defenders of the status quo — those who profit from this system — would love for you to believe as much.
The real reason for lawmakers to heed Kemp’s call is all the other people caught up in these legal fights. They – we – are the ones who pay the price. Parents have fewer choices, and pay higher prices, for child care because day care centers are facing costlier lawsuits. Consumers pay more for numerous goods because lawsuits targeting trucking companies raise rates for freight, embedding a hidden tax on everything their drivers haul.
Apartment buildings, pharmacies, groceries, convenience stores – all face lawsuits for what happens on their premises, whether they can control it or not. Many simply close their doors, depriving neighborhoods (usually poorer ones) of their services.
Medical malpractice lawsuits drive up the cost of care as doctors and hospitals pay more for liability insurance. Then those higher costs become the basis for more expensive personal-injury lawsuits. This vicious cycle is exacerbated by “phantom damages”: damages which are based on the “chargemaster rate” – the gigantic number at the top of your medical bill that neither you nor anyone else actually pays – rather than actual expenses.
On top of all that, the explosion in costly lawsuits stems in part from a practice known as third-party litigation funding. At its worst, this means investors are bankrolling lawsuits in hopes of profiting from an enormous verdict – a clear corruption of the justice system. When doe-eyed defenders of the status quo ask why more defendants don’t simply settle their cases, the answer in many instances is because the plaintiffs have a financial obligation to refuse any offer the defendant makes.
Not all of these aspects, nor the many others unmentioned here, will be addressed this year. A long slog lies ahead of those seeking to bring the scales of justice back into balance.
But it’s encouraging to hear Kemp insist on getting part of the job done now.
Add your name: Georgia needs tort reform!
Georgia’s legal environment has deteriorated to the point that it threatens all the other good work policy makers have done over the decades. This can be fixed!