Before rushing into legislation to create yet another “loser pays” rule in Georgia law, it is useful to examine the five forms of “loser pays” rules we already have. I wrote earlier about OCGA 9-11-68 (offer of judgment / offer of settlement rule and frivolous claims and defenses rule) and OCGA 9-11-14 (no justiciable issue, delay, harassment).
The 1989 wave of tort reform legislation included O.C.G.A. §§ 51-7-80 et seq., which created a statutory tort of abusive litigation giving rise to liability against “any person who takes an active part in the initiation, continuation, or procurement of civil proceedings against another . . . if such person acts [w]ith malice; and [w]ithout substantial justification.”
The claim for abusive litigation is initiated by a notice, with statutory proof of delivery, giving the other party an opportunity to voluntarily drop the allegedly abusive claim,defense, motion or position.
It is a complete defense to the tort of abusive litigation if the allegedly abusive position is dropped within thirty days from receipt of that notice. Other defenses are that the position was asserted in good faith, though that is an affirmative defense in which the burden of proof is on the party that had asserted the position, and that the party against whom the abusive litigation claim is asserted was substantially successful in the underlying litigation. The “reasonable inquiry” requirement of is an objective good faith requirement which imposes a duty on attorneys to conduct a reasonable inquiry into the facts and law prior to initiating, continuing, or procuring a claim on behalf of a client, so the standard is what would be objectively reasonable for a competent attorney under the circumstances.
Where the allegedly abusive claim or defense survives a motion for summary judgment, or involves a question of first impression, the abusive litigation claim fails. Bacon v. Volvo Service Center, Inc., 288 Ga. App. 399, 654 S.E.2d 225 (2007) (survived summary judgment); Land v. Boone, 265 Ga. App. 551, 594 S.E.2d 741 (2004) (first impression); Owens v. Generali-U.S. Branch, 224 Ga. App. 290, 480 S.E.2d 863 (1997) (lack of binding authority at time claim asserted).
While seldom invoked in practice, this provision is available and appropriate in responding to truly frivolous lawsuits.
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. 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). 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.