Op-Ed | Lawsuit Reform Essential to Georgia Business Growth
By Chris Clark, President & CEO of the Georgia Chamber of Commerce
For well over a century, the Georgia Chamber has been a fierce champion for free enterprise and job creation in all 159 counties of our state. We work to improve our business climate, help companies expand and create jobs, improve the skills of Georgians so they can move from poverty to prosperity and promote the potential of rural communities every day while tackling the toughest problems facing our cities. We believe in a strong business-friendly environment because with ever-growing commerce comes employment opportunity, talent development and an overall vibrant quality of life across a diverse array of lifestyles. With Georgia ranked the top state in which to do business, it is important that our legislators continue making bold decisions which will protect the environment that has earned us this ranking for seven straight years. However, the “best for business” can’t be the best when we are equally considered to be one of the worst in tort costs and judicial liability.
According to the U.S. Chamber Institute for Legal Reform*, when it comes to ‘lawsuit climates’, Georgia ranks 41st. The business community desires a fair and equitable system for all. Lawsuit reform should address the current inequalities that exist within our judicial equation. These imbalanced statutes have been grossly identified in a recent State Senate Committee study**. The study, in fact, highlights the unlimited risk every small business incurs when it chooses to do business in Georgia.
Take, for instance, a couple of the examples from Kyle Wingfield’s recent column in Savannah Now. His article focused on urban area businesses like Six Flags which was held liable for $35-million over an attack of three individuals on the fringe of its property; or a man being awarded $43-million from CVS after being shot in one of its parking lots when the man was there, after-hours, for a meet-up to conduct personal business. The Senate study noted details such as seat belt usage as admissible evidence in court. Studies have shown that those who wear seat belts reduce their risk of injury by 45-60%. However, since this evidence is not permissible in these cases, medical costs are almost nearly three times higher in automobile accident claims. A tightening of the ‘belt’ may be in order with these regulatory details – pun fully intended, by the way.
We hear examples every day as we travel through rural Georgia as well. For example, a company almost went bankrupt because an employee broke into its property, stole a vehicle and hit another car; the man went to jail, but the company was put in dire financial straits. Then there’s the healthcare system that is on the brink of insolvency because of the skyrocketing cost of malpractice insurance. Just last week, I heard of a small firm that will have to close after being sued by an out-of-state lawyer for a common slip-and-fall incident. One Chamber member shared that it now has a line item in its budget exclusively for ‘frivolous lawsuits’ because taking them to court in this environment would be far more costly.
So, how do legislators balance this equation? An initial point of order would include a revision to premises liability/negligent security which would protect property owners from liability that occurs on their property but outside of their control. Other recommendations in the bill focus on the Georgia Rules of Civil Procedure and recommend that they align with federal regulation in order to help streamline cases and make litigation more efficient. Fair and balanced legislation is the goal. When both sides of the equation can come together and determine what is in the best interest of the whole, balance is achieved. For the Georgia Chamber, the best for business is in our collective best interest. That is how jobs are created, talent is cultivated, and Georgia’s dynamic quality of life is attained.
The last tort reform legislated in Georgia was in 2005, exactly 15 years ago. For Georgia – and the United States, for that matter – to effectively compete in an ever-emerging global economy, our leaders must address this issue and bring balance to it. In doing so, we will continue to earn Georgia’s place as ‘Top in the Nation’ for business.
*Costs and Compensation of the U.S. Tort System (2018) – U.S. Chamber Institute for Legal Reform
** The Final Report of the Senate Study Committee on Reducing Georgia’s Cost of Doing Business (SR433)