Georgia “loser pays” tort reform rule #2 – frivolous claim or defense
“Loser pays” is a popular theme among advocates of “tort reform,” many of whom may not understand what the popular political calls for “loser pays” or “tort reform” really mean in any detail. Perhaps some people who say they are for it do not understand that Georgia already has five “loser pays” rules that have been enacted in legislation over the years.
Yesterday I posted a summary of one of our “loser pays” rules, the offer of judgment under OCGA 9-11-68, which applies when a party rejects an offer of judgment or settlement and does not do at least 25% better at trial.
A second “loser pays” provision in Georgia law strikes more directly at the concept of frivolous lawsuits, which all tort reform advocates deplore. (I have no idea how any lawyer could survive economically by filing frivolous lawsuits which are almost always doomed to fail, but that is another topic.)
O.C.G.A. § 9-11-68(e), which was enacted as part of the 2005 tort reform legislation, provides a remedy to recover “reasonable and necessary attorney’s fees and expenses of litigation.” Upon motion of the prevailing party when a verdict or judgment is rendered, in a bifurcated proceeding the finder of fact may determine whether the opposing party had presented a frivolous claim or defense, and then award damages against the party presenting the frivolous claim or defense.
A frivolous claim or defense includes, but is not limited to:
“(A) A claim, defense, or other position that lacks substantial justification or that is not made in good faith or that is made with malice or a wrongful purpose,” as defined in O.C.G.A. § 51-7-80;
(B) A claim, defense, or other position with respect to which there existed such a complete absence of any justiciable issue of law or fact that it could not be reasonably believed that a court would accept the asserted claim, defense, or other position; and
(C) A claim, defense, or other position that was interposed for delay or harassment.”
A party may elect to pursue either the procedure specified in this subsection or the procedure provided in O.C.G.A. § 9-15-14 (an older “loser pays” rule which I will discuss in another post), but not both.
This procedure applies equally to both frivolous claims by plaintiffs and frivolous defenses by defendants. One cannot help but wonder whether those who are not satisfied with sanctions that go both ways want to put a well-funded thumb on the scale of justice favoring the defense only.
See summary post, “Does Georgia need more than five ‘loser pays’ rules?”
Ken Shigley is immediate past president of the State Bar of Georgia and current chair of the board of the Institute for Continuing Legal Education in Georgia. In the American Association Justice, he is secretary of the Motor Vehicle, Highway & Premises Liability Section and a board member of the Trucking Litigation Group. Lead author of Georgia Law of Torts: Trial Preparation & Practice (West, 2010-12), he has an AV Preeminent rating in Martindale-Hubbell Law Directory and Bar Register of Preeminent Lawyers, double board certification in Civil Trial Advocacy and Civil Pretrial Advocacy from the National Board of Legal Specialty Certification (formerly National Board of Trial Advocacy). In addition, he is listed in Super Lawyers (Atlanta Magazine), Legal Elite (Georgia Trend) and Who’s Who in Law (Atlanta Business Chronicle).