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The Supreme Court of Georgia Upholds the “Offer of Settlement” Statute, OCGA § 9-11-68

judge.jpgIn 2005, by the narrowest of margins, the Georgia Legislature passed sweeping changes to Georgia’s tort laws, known as SB3. Included in those changes was the new “Offer of Settlement” statute, codified at OCGA § 9-11-68. The Offer of Settlement statute has created a new mechanism for punishing a party to litigation with attorney’s fees. Georgia already has two statutes (OCGA §§ 9-15-14 and 13-6-11) that subject parties to statutory penalties, including attorney’s fees, for bringing frivolous suits or unreasonably litigating matters. The Offer of Settlement statute is different in it applies to all cases even meritorious suits that prevail at trial. This statute sets up situations where injured victims may win a jury verdict but end up with a net loss because the insurance companies’ attorney’s fees exceed the verdict. This week, the Supreme Court of Georgia in a 5-2 decision upheld the Offer of Settlement statute overruling the trial court’s finding that the statute violated the Georgia Consitution’s right to access the courts.

In her dissent, the honorable Justice Hunstein artfully explained why this statute does in fact violate our constitutional access to the courts as follows: “OCGA § 9-11-68(b)(1) penalizes plaintiffs with meritorious causes of action for an impossiblity, namely, their failure to see into the future so as to calculate the precise amount a factfinder may award them for the damages they reasonably believed they sustained at the hands of the defendants…No party intending to file a cause of action in tort can foresee whether she will recover ‘enough’ money to avoid the effect of OCGA § 9-11-68(b)(1).”

The practical effect of this statute is that it will make it extremely difficult for middle class Georgia citizens to pursue meritorious cases. As discussed above, if an injured person fails to recover “enough” money from the jury, the insurance company can take a judgment against the injured person for the attorney’s fees they paid defending the case. Those without significant assets will not be deterred from pursing meritorious cases, because there is no way to collect a judgment against someone that has nothing (also known as “judgment proof”). The wealthy will still seek justice and their day in court knowing they can afford the unlikely result of a lower than expected jury verdict in their favor. The middle class injured victim is the only one truly stung by this new law. Many will still seek justice, but there are those that will forgo pursing recovery for their broken bones and medical expenses because the fear of having to pay for the insurance companies’ lawyer. This new law is just one of many challenges an experienced Georgia personal injury lawyer must negotiate in the mine field that is civil litigation.