The Georgia Chamber of Commerce held a forum on tort reform last week. According to today’s Daily Report, Rep. Rich Golick, chair of the House Non-Civil Judiciary Committee who is a corporate attorney for Allstate Insurance Company in his “day job,” told the attendees:
“Go talk to the plaintiffs bar. … See if consensus can be struck,” he said. “I beseech you — it’s the middle of August and there is a run-off and a general election — now is a great time for quiet conversation in quiet rooms where consensus can be achieved.”
After the forum, Golick said, “My sense is that the General Assembly doesn’t have a taste for litigation that would create a holy war in Georgia.”
Rep. Golick is right. While there may be tweaks in Georgia tort law and procedure on which there could be consensus, my sense of the climate after dealing with the legislature last year as State Bar president is that there is little eagerness to add much more to the broad tort reform legislation that Georgia enacted in 2005.
Here are some of the issues discussed at the forum and my thoughts on them.
At the Chamber forum, a representative of General Electric complained about burdensome discovery processes regarding electronically stored information. I’m all for developing a state rule on e-discovery that reasonably limits burdens and costs without enabling concealment of important evidence.
Perhaps the G.E. representative who flew in for the meeting was unaware that there is already a joint Bar-Chamber task force working on this in Georgia. Last spring, one of the last things I did as State Bar president was to cooperate with the Georgia Chamber of Commerce in appointing a joint task force on development of electronic discovery rules to include provisions for cost control and proportionality. By agreement with the Chamber representatives, that task force is chaired by Cobb County Superior Court Judge Steve Schuster and includes 4 Bar appointees and 4 Chamber appointees. They have just begun to work.
Time limit demands.
State Sen. Bill Cowsert of Athens is quoted in the Daily Report saying he would like to see legislation next session that would set “a reasonable length of time to give an insurance company to settle a case.” This grows out of the case Southern General Ins. Co. v. Holt, 262 Ga. 267; 416 S.E.2d 274 (1992), which held that a plaintiff may place a reasonable time limit on an offer to settle for policy limits. If a case is not settled within the time limit, then the insurer may be exposed to a judgment in excess of its insured’s policy limits if a jury returns a verdict for a greater amount.
Insurer bad faith liability is based on the principle that a liability insurer has a duty of good faith to its own insured to give equal consideration to the insured’s interests as its own. For nearly half a century it has been the law in Georgia that if the insurer refused an opportunity to protect the insured by settlement within policy limits it could be responsible for the full amount of a judgment against the insured. The Holt case in 1992 held that within the facts of that case, a 10 day time limit on an offer to settle for policy limits was reasonable.
The importance of a time limit in this context is to provide an incentive for an insurance company to stop stonewalling and unnecessarily putting at risk the personal or corporate assets and income of the insured defendant.
My general approach has been to give an insurer a 30-day time limit after providing the bulk of medical bills, medical records, income loss records, photos, reports, etc., so that the insurer would have a fair opportunity to assess damages in excess of policy limits. When there is a request for more time, I generally allow a reasonable extension. Occasionally, I have felt that a shorter time limit was appropriate but one should be careful to be reasonable both in substance and in appearance.
Senator Cowsert is quoted in the Daily Report as saying, “Reputable plaintiffs lawyers will give you 30 to 60 days.” A bill he introduced in the last legislative session would have required 60 days. I told him I generally give 30 days, to which he replied, “yeah, but you’re a good lawyer.”
The key here is the need for reasonableness and fairness on both sides with standards that keep both sides honest. I hope that both sides can work together to develop a fair, simple and balanced standard.
Seat Belt Evidence.
At the Chamber forum, a representative of an auto manufacturer urged change in Georgia law that excludes evidence that an injury victim was not wearing a seat belt. The origin of this rule is that the late House Speaker Tom Murphy did not like seat belts, did not want to wear one, and would allow passage of a law requiring seat belt use only if non-use were excluded from evidence. I can understand the viewpoint of those who think this makes little sense.
One problem is that even when an injury victim was consistently conscientious about always wearing a seat belt, in the trial of a catastrophic case involving defective design of a vehicle, the defense is likely to bring in highly paid experts to suggest that the person was not wearing the seat belt even if they were. Part of the strategy is to inject even greater complexity and confusion with highly paid testimony about the meaning of markings on belts and buckles, and whether those result from normal wear and tear versus stress loading. This can add vast amounts to the cost of litigation, bog down a jury in unnecessary complexity on ancillary issues, and often unfairly feed a “blame the victim” defense strategy.
I don’t know what the ideal solution should be, but I do hope that any legislative changes would be the result of negotiation and conscientious consensus rather than one side bulldozing over the other in the legislature.
Georgia has five statutory “loser pays” rules. The oldest is OCGA 13-6-11 which was passed with the Code of 1863. For nearly 150 years, it has provided that when a defendant acts in bad faith, is stubbornly litigious or causes unnecessary trouble and expense, it can be held liable for expenses of litigation including attorney fees. In the past generation, there has been a series of cases holding that violation of mandatory safety rules can be considered by a jury as evidence of bad faith in the transaction, and thus a basis for an award of attorney fees.
I have used this in trucking cases where we can prove violation of Federal Motor Carrier Safety Regulations or the correlate state safety rules. There is also a case approving use of a fire safety code as evidence of bad faith in the transaction.
Whenever asked, I have urged my fellow plaintiff lawyers to refrain from pushing this too far and provoking a backlash. Whenever a younger lawyer has asked my advice, I have told them to avoid overreaching by claiming that there is bad faith every time a driver breaks a traffic law.That is qualitatively different from systemic violation of very specific safety rules which a relatively sophisticated party is obligated to follow and require its employees to follow for protection of the public.
Perhaps there could be a compromise on defining the scope of what would constitute bad faith in the transaction under OCGA 13-6-11, perhaps by simply codifying what is in current case law. Or perhaps the provisions of this statute could be made available to both sides. But I urge legislators to refrain from throwing out the baby with the bath water by more substantially changing a law that has been functional part of the Georgia code since the Civil War.
Some at the Chamber forum advocated allowing evidence of the actual amount a medical provider accepted in payment from a health insurance company in payment of medical bills, rather than the larger “sticker price” that appears on a medical bill. That would override the venerable “collateral source” rule that does not allow presentation to the jury of either liability insurance or medical insurance information. If a person has provided for her health care by having insurance the defendant who causes her injury should not get a discount for that.
Frankly, there are a few medical providers, particularly some pain clinics, that inflate the “sticker price,” knowing they will accept a lesser amount from an insurer. Their reasoning is incomprehensible to me. On the rare occasion when I have seen that in representing a plaintiff, I have hired a billing expert to provide evidence of what the UCR (usual, customary and reasonable) billing amount should have been. I don’t want to blow my credibility by endorsing obviously inflated medical bills. If bills are inflated, either side should be able to show what the UCR billing should have been, and if so perhaps the amount of an enforceable medical lien should not exceed what a jury finds is the UCR amount.
The larger reality today is that medical insurance programs usually include an aggressively enforced reimbursement clause requiring that the insurer be paid back most or all of what they pay for an injury victim’s medical bills. If the law were changed to limit evidence of medical expense to the amount a medical provider accepted under a contractual agreement from a medical insurer, then in all fairness the jury should also be told that none of the money included in the verdict for medical expense would go to the injured person but would only benefit an insurance company. Therefore, they should award more money if they intend to help the injured person.
Then why not let it all hang out by allowing evidence of the defendant’s liability insurance limits (which jurors usually want to know), what both parties paid for their various insurance coverages, etc.?
Or just leave well enough alone.
Duty to Warn.
An auto industry representative urged adoption of a law eliminating any continuing duty of manufacturers to warn of some danger it became aware of after the sale of a vehicle. On first blush that may sound sound fair. But what of the situation where a manufacturer learns that a design defect is responsible for a mounting number of deaths and catastrophic injuries? Should there not be a duty to warn consumers of that?
Perhaps there is a room for a legislative tweak in existing law on duty to warn, but as Rep. Golick suggested, it should be done through consensus.
Bifurcation of trials.
Georgia law already requires bifurcation of trial where punitive damages are claimed, with a second phase of trial to consider any punitive award after liability and compensatory damages are decided. A representative of an auto manufacturer proposed a further level of bifurcation between liability and damages. It is not entirely clear from the news story exactly what he was proposing, but I am confident it is carefully designed to help defendants and reduce any leverage available to injured people.
One astute defense strategy is to attempt to exclude all evidence of the defendant’s bad conduct by any means available, sometimes by conceding liability at the last moment after years of fighting accountability. Then, if that strategy works, the plaintiff’s injury is removed from the context of what caused it and the trial becomes entirely about attacking the injured plaintiff to try to make it appear as if the jurors are inconvenienced merely because a greedy plaintiff is overreaching. Never mind that the defendant may have resolutely denied liability right until the eve of trial.
It has been the law in Georgia since at least the mid-19th century that evidence of the defendant’s conduct goes into evidence even if there is an offer of a stipulation to liability. That is a good rule and we should keep it.
I’m a pretty conservative guy, both politically and personally, a member of a bunch of conservative organizations, and spent a decade representing insurance companies before I went into plaintiffs’ practice. I don’t see the world in terms of personal injury plaintiffs always being right and good or corporations and insurers always being wrong and evil. I recognize that there is necessarily always a dynamic interplay between interests in setting the rules in the area of tort and insurance law.
The outcome is likely to be better and fairer if it is a result of respectful dialogue, negotiation and consensus rather than pure power politics.
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. 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).