The normal rule in Georgia personal injury lawsuits is that each party is responsible for its own attorney’s fees and costs. Of course, the Georgia legislature may alter this rule. One such exception is contained in a 2005 “tort reform” law that allows a defendant to recover attorney fees from a plaintiff under certain circumstances.
Richardson v. Locklyn
Specifically, if a defendant offers to settle a personal injury claim, the plaintiff rejects the offer, and the jury later returns a damage award that is “less than 75%” of the offer, the defendant is entitled to collect attorney fees. The judge may decline an award, however, if the defendant’s original offer “was not made in good faith.”
The question of what constitutes a “good faith” offer and the procedure a judge must use for making that determination was the subject of a recent Georgia Court of Appeals case. The original lawsuit involved a car accident. The plaintiff sued the defendant for damages related to her “medical bills, lost wages, and pain and suffering.”
During pretrial proceedings, the plaintiff presented her medical bills from the accident, which at the time were approximately $19,000. The defendant offered a settlement for $12,500. The plaintiff rejected the offer and the case proceeded to trial.
The jury returned a verdict for the plaintiff and awarded approximately $7,000 in damages. This reflected the plaintiff’s medical bills from the day of the accident but not other care she received afterwards. Since $7,000 was “less than 75%” of $12,500, the defendant asked the court to award her attorney fees and costs.
The plaintiff maintained the settlement offer was “not made in good faith” because, at the time it was made, the plaintiff had claimed $19,000 in medical expenses. The plaintiff also noted the defendant had conceded liability for the accident prior to trial. The judge agreed with the plaintiff and denied the defendant’s petition.
But the Court of Appeals, by a 5-4 vote, held the judge should have held an evidentiary hearing before making a final ruling on the question of attorney fees. There was no question that the settlement offer fell below the 75% threshold. So the only issue was whether the offer was made in “good faith.”
The appeals court noted that Georgia’s settlement rule was modeled on a similar law in Florida, and the courts in that state have held the burden is on the offeree–the plaintiff in this case–to prove the other side’s offer was not made in good faith. At least one Florida appeals court has said a trial court must hold a hearing before deciding whether to award or deny attorney fees. The Georgia Court of Appeals said the same rule now applies in this state.
Four judges dissented. The dissent noted the plaintiff here never requested a hearing and “the record did not demand a factual finding by the trial court” that the defendant acted in good faith. More to the point, the dissent said the 2005 tort reform law simply does not require any sort of hearing.