Kemp’s push for litigation limits supported by small business leaders

Representatives of Georgia’s small business community told Gov. Brian Kemp on Thursday they’re being crushed by the increasing insurance costs and other expenses associated with the state’s civil litigation framework that they say is heavily weighted in favor of plaintiffs.

Kemp hosted a roundtable discussion at a Hapeville bus company as part of his yearslong effort to rein in costly and frivolous civil litigation, which he says harm the state’s businesses. The Republican plans to hold two more roundtables aimed at informing litigation reform ahead of the state’s 2025 legislative session.

“Lawsuits have become a significant pain point for both businesses like those represented here today and the Georgians that they serve,” Kemp said. “For 10 years, we have remained the number one state in the country for business. If we want to maintain that distinction, this is an issue that we must address.”

The more than a dozen business representatives and Republican lawmakers who took part in the discussion reiterated that they don’t want to take away an injured person’s ability to recover fair compensation through the courts. They said it’s about helping businesses fight “frivolous lawsuits” that, despite having no merit, end up costing companies tens or hundreds of thousands of dollars.

Trial lawyers claim limiting civil litigation would benefit powerful corporations while robbing Georgians of their legal rights. The Georgia Trial Lawyers Association says Georgia’s court system is “the envy of the world” despite attempts by “propaganda groups funded by large multi-national corporations” to bully Georgia judges and mislead state legislators with claims that Georgia is a “judicial hellhole.”

The GTLA says it is “taking action to ensure that the courthouse doors remain open to everyday Georgians who are harmed by the wrongful conduct of negligent persons and corporations,” and “educating lawmakers and the general public on the importance of a fair and impartial judiciary, including why unfounded attacks on Georgia’s judicial system should not be tolerated.”

“A fair and healthy civil justice system has been and will continue to be good for business in Georgia,” GTLA president Jason Branch said.

Business representatives at the meeting Thursday said business owners are usually forced to settle bogus claims because there’s little chance of a quick or cheap resolution in Georgia courts. Taking a case to trial involves the risk that a jury will award a “nuclear verdict” of at least $10 million to an injured party, they said.

John Sambdman, the CEO of Samson Tours, where the roundtable was held, said his business is “getting hammered left and right by lawyers” who see an easy windfall in representing plaintiffs. He said Samson Tours currently faces eight civil claims, four of which are “completely frivolous” and three more are “suspect.”

The more litigation-related expenses a business faces, the harder it is for the business to get insurance, representatives said. They said insurers are hiking premiums, creating more coverage exclusions and leaving Georgia markets like never before.

“It’s gotten to the point where it’s almost untenable in the state of Georgia to find coverage for my kind of business,” Sambdman said. “Back in the day, there were probably 15 different companies to choose from to get quotes. Now there’s four, maybe five. The problem is just getting worse.”

Georgia Insurance and Safety Fire Commissioner John King said insurance companies are asking for rate increases of an average of 25% and that while “we’ve been able to keep them about 12-14%,” the pressure is increasing. He said insurance companies are “walking away” from Georgia.

“We have a challenge where our public thinks that when they get in an accident, they’ve won the lottery,” King said.

It’s not just transportation companies in strife, said Robert Hill, president elect of the Georgia Child Care Association. He said his business, KIDazzle Child Care, is paying double what it did in 2018 for insurance.

John Triplett, who co-owns 10 grocery stores across Georgia, said liability insurance is a problem for the business, which sees 1,000 customers a day “that could potentially slip and fall and sue.”

Matt Jones, chairman of the Georgia Association of Convenience Stores, said Georgia’s economy is losing billions of dollars through litigation settlements, most of which are structured in a way that the recovery is tax-free. He said the filing of “frivolous” lawsuits has become a business, the taming of which is “a no-brainer.”

“To say things like ‘This is about civil justice’ is a farce,” said Jones, an attorney. “We’ve made it far too easy for the plaintiffs industry. The judiciary recognizes this needs to be addressed legislatively.”

In a 2023 Georgia Supreme Court ruling upholding a $45 million jury verdict awarded to a man shot in the parking lot of an Atlanta CVS pharmacy, several justices warned that high-crime areas could become devoid of businesses as owners face increased exposure to liability. They said service costs in such neighborhoods could rise to offset the expense of additional security measures, and urged the Georgia General Assembly to consider those issues in relation to premises liability laws.

Kemp said he’s “committed to hearing all voices and sides of this issue.” He’s also awaiting insurance data being collected through legislation signed this year to better understand the state’s litigation climate. He said the ultimate goal is “stabilizing costs for Georgia citizens and businesses and making sure that they have access to multiple folks in the marketplace.”

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