The Zelle Lonestar Lowdown
May 21, 2025
In a legislative whirlwind that has left Georgia’s legal landscape noticeably altered, Governor Brian Kemp recently signed into law two landmark tort reform bills—Senate Bill 68 (“SB 68”) and Senate Bill 69 (“SB 69”)—ushering in a new era in personal injury litigation. The purported goal of this legislation is to assist judges and juries in deciding appropriate damage awards for injured parties and to avoid what some believe is trickery by plaintiffs’ attorneys in personal injury lawsuits.
While “Nuclear verdicts,” where a single injured party receives a verdict in excess of $10 million, can occur nationwide, there is no denying that Atlanta’s highways have become adorned with billboards advertising personal injury law firms. Sources such as the Insurance Research Counsel (IRC) and the Insurance Information Institute (Triple I), funded by insurance companies, have reported that Georgia insurance costs exceed the national average, partly due to legal system abuse. These groups advocated heavily for tort reform and succeeded.
Proponents of the legislation believe the changes will decrease verdicts and litigation costs, which will in turn allow insurance companies to decrease insurance premiums for Georgia businesses. This will, proponents argue, promote business in Georgia, create jobs, and benefit consumers. Opponents argue that the legislation will hinder injured parties’ ability to receive fair compensation and lead to disparate results as jurors are left to their own devices.
Regardless of where you stand, tort reform is here, and only time will tell if the promise of stable insurance premiums is realized.
SB 68: A Shield for Businesses and Insurers
SB 68, the omnibus tort reform bill, introduces several crucial changes:
• The introduction of “Phantom Damages” has been eliminated.
Before SB 68, injured plaintiffs could introduce evidence of “chargemaster” rates, which are typically charged by medical providers to health insurance companies. These rates are often higher than what the medical provider is ultimately paid. Nevertheless, these were the only rates presented to juries to be considered in their awards of damages.
Now, defendants may introduce counterevidence showing jurors the amounts a given plaintiff (or that plaintiff’s health insurer) actually paid to the plaintiff’s medical provider. Before SB 68, Georgia’s common law “Collateral Source Rule” prevented the introduction of these actual rates. Jurors were thus never informed of the actual costs of medical treatment. In an effort to increase transparency and bring verdicts closer in line with the amounts charged for medical treatment stemming from injury, SB 68 alters existing evidentiary rules so that judges and jurors can consider both the aforementioned chargemaster rates and the amounts actually charged for treatment. Triers of fact may consider both rates in their evaluation of the reasonable value of the treatment the plaintiff received.
The plaintiffs’ bar has argued that injured parties should be entitled to recover the full value of the medical service they receive, regardless of payment. For many years, that premise remained in place under Georgia’s Collateral Source Rule. Even with the passing of SB 68, plaintiffs will still be able to present evidence of the full value of the medical services rendered, but defendants can now present competing evidence reflecting the actual amounts paid.
• “Jury Anchoring” has been banned.
Attorneys can no longer suggest damage amounts during closing arguments that are not rationally related to the evidence presented, preventing them from “anchoring” jurors’ expectations to inflated figures.
Prior to SB 68, attorneys were broadly permitted to reference specific monetary figures and suggest large awards in closing arguments when asserting recovery of non-economic damages, such as pain & suffering. These figures might include salaries paid to professional athletes, payouts from the Georgia Lottery, and other similarly inflated values, which attorneys would use as a baseline or anchor point in jurors’ minds to suggest their client’s injury should be valued at an amount equivalent to or exceeding those figures.
Plaintiffs’ attorneys argue the figures are used only to ease the concerns of jurors who might be reluctant to award a large sum, even where the evidence presented warrants it, and to provide a means of comparison stemming from figures jurors are already familiar with. They argue the change will prevent plaintiffs from recovering the full value of their general damages because they are no longer able to relate a potential award to a familiar monetary figure.
Proponents of the change contend, however, that it will reduce the chances of minor lawsuits resulting in unexpectedly high verdicts generated by jurors who have been predisposed to award unusually high amounts. Time will tell whether this change will have a substantial impact on verdicts in smaller cases.
• Seat belt evidence is now admissible.
In motor vehicle accident cases, evidence of seat belt use can now be presented, allowing juries to consider it when determining fault, causation, and damages. Previously, such evidence was inadmissible under Georgia law.
SB 68 allows courts to exclude such evidence where it appears its probative value is outweighed by the danger of unfair prejudice. Nevertheless, given that a majority of states generally allow such evidence in civil litigation, this appears to be an effort to bring Georgia more so in line with the majority rule.
• Negligent security claims have been limited.
Property owners’ liability for crimes committed on their premises by third parties is now restricted, reducing the risk of costly litigation for property insurers. Specifically, the scope of circumstances under which a third party’s criminal conduct might be reasonably foreseeable to a property owner has been narrowed. Trespassers and certain other categories of people, such as those who are not injured on property or those injured only after emergency authorities have been called, are now prevented from asserting claims against property owners.
In addition, apportionment of fault is now permitted between the property owner, plaintiff, and third-party criminals. SB 68 creates a rebuttable presumption that apportionment is unreasonable if the percentage of fault apportioned to third-party criminals is less than that apportioned to property owners, or others who did not act wrongfully. This change aims to prevent liability without reasonable knowledge of a potential hazard.
• The process of filing a motion to dismiss has been streamlined.
Previously, a defending party filing a motion to dismiss was still required to answer a plaintiff’s complaint, even before a ruling on the motion to dismiss was entered. Defending parties were also required to respond to any written discovery requests served along with the complaint, a procedure that differed from the Federal Rules of Civil Procedure that provide for a stay of discovery during the pendency of a motion to dismiss.
Now, with the passing of SB 68, defendants may file a motion to dismiss in lieu of an answer. While the motion is pending, an answer is not required and discovery is stayed, aligning Georgia’s rules with the Federal Rules in this respect.
• Double recovery of attorney’s fees has been precluded.
SB 68 also establishes a new code section to prevent civil litigants and their attorneys from recovering attorney’s fees and expenses of litigation under multiple statutory provisions. The new code section expressly prohibits double recovery, whether the statute or statutes used authorize awards for compensatory or punitive purposes. Contingency fees agreements also may no longer be used as evidence to establish reasonable attorney’s fees. Proponents argue this change will limit unexpectedly high verdicts stemming from jurors’ misunderstanding of the law. Opponents argue, on the other hand, that the change prevents plaintiffs from recovering the full value of the legal services they received.
• Bifurcation of trials in personal injury cases has been expanded.
Parties in personal injury cases may also now elect to have trial bifurcated (or trifurcated) into separate phases for liability and damages. In such a scenario, Phase 1 addresses liability and allocation of fault, whereas Phase 2, if needed, allows the trier of fact to determine compensatory damages, including special damages and pain & suffering. Phase 3 can then be conducted as well, to address punitive damages. In each phase, the evidence admitted is limited to that which is relevant to the issues before the court in that particular phase.
Bifurcation may be denied if the plaintiff was injured in a sexual offense, or if the amount in controversy is less than $150,000. The change aims to prevent bias against defending parties in earlier phases where evidence of damages or financial condition might be prejudicial but also considers the potential harm to injured parties that might result from being forced to testify multiple times.
• The use of dismissals without prejudice has been limited.
Prior to SB 68, plaintiffs could unilaterally dismiss a case without prejudice at any point before the first witness was sworn in at trial, after the expiration of the statute of limitations, and could still recommence it at a later date. Now, such a dismissal without court approval will only be effective within 60 days after the defendant files an answer. A second such dismissal results in a dismissal with prejudice.
Proponents argue this change prevents litigants from fully preparing for trial and spending considerable time and money, only to have trial postponed and the case reinstituted from scratch. The reforms are expected to reduce the frequency and severity of lawsuits, leading to lower claim costs and consequently more stable insurance premiums. The reforms are also aimed at increasing transparency, encouraging trust and public engagement in Georgia’s justice system.
SB 69: Regulating Third-Party Litigation Financing
SB 69 addresses the growing concern over third-party litigation financing, where investors fund costs and expenses associated with pursuing a lawsuit in exchange for later receiving a portion of the settlement or verdict.
Opponents of these arrangements argue that third-party litigation financing turns personal injury litigation into an investment product, which in turn will develop an industry including lobbyists and banks with incentives that may not align with the plaintiff’s best interest – let alone the public at large.
Proponents, on the other hand, argue that third-party financing allows injured parties to pursue legitimate but costly claims. All told, personal injury litigation is a numbers game funded by periodic large verdicts. Without the large verdicts, or third-party funding, plaintiffs’ attorneys argue they will take fewer cases and help fewer people.
Key provisions of SB 69 include:
• Mandatory registration has been implemented for third-party litigation financiers.
All litigation financiers must register with the Georgia Department of Banking and Finance, provide certain consumer disclosures to their customers, and avoid becoming involved in the strategy or decision-making associated with funded matters, ensuring proper regulation and uniformity.
• Foreign investment has been restricted.
Entities outside the United States are now barred from investing in Georgia lawsuits, protecting the state’s legal system from external influences. When registering with the Georgia Department of Banking and Finance, litigation financiers must disclose international persons or entities contributing to the financing and cannot receive funding from foreign governments or federally designated foreign adversaries.
• Disclosure requirements have been implemented.
Third-party litigation financing agreements providing $25,000 or more in funding must now be in writing, and their existence, terms, and conditions are discoverable by opposing parties, enhancing transparency in legal proceedings. SB 69 aims to prevent the escalation of litigation costs driven by external investors seeking high returns, and to increase the level of transparency in civil litigation by curbing the influence of third-party litigation financing entities.
• The percentage litigation financiers may recover has been limited.
Litigation financiers are prohibited from receiving a share of a plaintiff’s recovery that exceeds the net recovery by that plaintiff after disbursement of attorney’s fees and costs. Entities that provide goods or services to a plaintiff to pursue litigation are also precluded from having a financial interest in litigation financing provided to that plaintiff. Litigation financiers providing $25,000 or more in funding may also be held jointly and severally liable for an award of sanctions or costs against a consumer, entity, or its legal representative. These changes are expected to reduce frivolous lawsuits and increase transparency in litigation by disallowing entities from investing in Georgia lawsuits without consequence.
Opponents argue that litigation financiers help lower-income individuals access Georgia’s justice system, while Proponents argue the changes prevent foreign adversaries from profiting from Georgia lawsuits at the expense of Georgia insurers and consumers. Time will tell whether SB 69 discourages such entities from further expanding their business in Georgia.
Expected Benefits for Insurers and their Policyholders
The enactment of SB 68 and SB 69 is expected to yield several key benefits for insurers, which proponents believe will ultimately benefit Georgia businesses and consumers:
- Reduced Litigation Costs: With fewer frivolous lawsuits and lower damage awards, insurers can expect a decrease in legal expenses and claim payouts.
- Stable Premiums: Lower claims costs are expected to lead to more predictable and competitive insurance premiums for consumers.
- Enhanced Risk Assessment: Clearer liability standards and reduced uncertainty allow insurers and business owners to more accurately assess and evaluate risk.
- Improved Market Conditions: A more balanced legal environment can attract more insurers and businesses to the state, increasing competition and benefiting consumers.
Conclusion
Governor Kemp’s signing of SB 68 and SB 69 marks a pivotal moment for Georgia’s legal and insurance landscapes. By limiting excessive liability, promoting greater transparency in the courtroom, and regulating third-party financing, the laws aim to create a more balanced and predictable environment for businesses and insurers in personal injury litigation.
Proponents hope these laws will prevent the further increase of insurance premiums in Georgia and benefit consumers. Opponents argue they may create constitutional issues regarding Georgians’ right to participate in the justice system, and that they may not lead to lower insurance premiums. The full impact of these laws will unfold over time.
