What Tort Reform Means to Georgians

by Rachel Elovitz, Esq.

Between 1997 and 2007 medical tort costs in the United States reportedly doubled from $15 billion to $30 billion.1 During that same period, the median jury award in medical liability cases tripled from $157,000 to $487,000.2 By 2003 America’s civil justice system reportedly cost $246 billion, $845 per citizen or $3,380 for a family of four, the most expensive civil justice system in the industrialized world, according to the American Tort Reform Association (ATRA).3 In just three years (between 2000 and 2003), tort costs reportedly increased 35.4 percent.4 Over the last 50 years, U.S. tort costs have exceeded the Gross Domestic Product (GDP) by 2 to 3 percentage points.5 America, according to ATRA, has a grossly ineffectual civil justice system that “returns less than 50 cents on the dollar and less than 22 cents for actual economic loss to claimants.”6 This reality has inspired legislative action in Georgia and resulted in various reforms since 2000.

Perhaps the most notable of reforms occurred in 2005, when on Feb. 16, 2005, Governor Sonny Perdue signed S.B. 3. This notable piece of legislation called for the elimination of joint and several liability, immunity for emergency rooms and ER providers in the absence of “gross negligence,” and a cap of non-economic medical malpractice damages of $350,000 per entity, $1,050,000 total.7 S.B. 3 also served to moderate fears that an apology or expressions of sympathy or regret by a medical provider could be used as an admission of liability by making such expressions inadmissible in evidence. The language of S.B. 3 was incorporated into various related code sections including OCGA §§ 51-13-1, 51-12-5.1, and 51-1-29.5.

The next year (in 2006), S.B. 239 was enacted, making a party who declined an offer of settlement potentially liable for attorney’s fees and court costs in the event the defendant was found not liable or the judgment was only 75 percent of the settlement offer.9 In the event of a plaintiff’s verdict, the defendant would be liable for attorney’s fees and litigation costs if the judgment was 125 percent greater than the defendant’s offer.10 The language of S.B. 239 was incorporated into OCGA § 9-11-68. Punitive damages have also been limited in Georgia to $250,000, unless the plaintiff is able to prove that the defendant acted with the intent to harm.11

Georgians, however, like the rest of Americans, are far from united on the path for continued reforms. Many agree with Anthony Tarricone, president of the American Association of Justice (formerly the Association of Trial Lawyers of America), who recently opined that “Patient’s rights aren’t bargaining chips,” noting that 98,000 people die each year from medical errors.12 Health care reform, he said, “should first do no harm.” According to the AAJ, medical malpractice is a “tiny percentage of health care costs – less than two percent of overall spending,” a figure supported by the Government Accountability Office (GAO) and the Congressional Budget Office (CBO). Moreover, medical malpractice suits are reportedly “less than one percent of the entire civil caseload…and have been declining for nearly a decade.”13

Former presidential candidate and medical doctor Howard Dean’s recent commentary during Rep. Jim Moran’s town hall meeting seemed to be the impetus for this AAJ backlash, which some are applauding and others condemning, claiming that limits on non-economic damages “do not bargain away patients’ rights,” rather, “limit the trial lawyers’ pay day.”14

According to Georgia’s William F. Jourdain, chair of Minor, Bell & Neal’s litigation section, “Over four years after enactment of the 2005 Georgia Tort Reform Act, several provisions have been declared unconstitutional or struck down for other reasons.”15 Jourdain cites to O.C.G.A. § 9-11-68 (settlement offers/awards of attorney’s fees) with respect to which the Georgia Supreme Court was scheduled to hear oral argument on Sept. 15, 2009, in the case of Atlanta Oculoplastic Surgery v. Nestlehutt et al., S09A1432. He alludes as well to O.C.G.A. § 51-13-1, which was declared unconstitutional by the trial court in the matter of Park v. Wellstar Health System (Fulton Superior Court Docket No. 2007CV135208). In the Park case the appellate court never had the opportunity to rule on the statute’s constitutionality, as the parties arrived at a post-judgment settlement, obviating the need for an appeal. The two cases share very similar issues, so that the forthcoming decision may offer some interesting insight into the matter.

Some Georgians argue that existing reforms have failed to change the status quo. According to Allison Wall, then the executive director of Georgia Watch, when Governor Sonny Perdue instigated the 2005 tort reforms, medical malpractice insurance rates were “skyrocketing.16 After the Bill’s enactment, “MAG Mutual, Georgia’s largest doctor insurer, increased doctors’ premiums by 53.5 percent between 2002 and 2004, despite projecting a 33.1 percent decline in future payouts to victims.”17

Also, according to Ms. Wall, S.B. 3’s cap on compensation to a victim for physical loss and disability to $350,000 is a “one-size-fits-all approach [that] brutally affects retirees, veterans, stay-at-home parents and anyone else who does not work or works for modest pay.”18 An “insurance executive or corporate CEO with the exact same injury,” Ms. Wall said, “will still receive millions of dollars in ‘economic damages’ for life for their six-figure salary.”19 It is a law, according to Ms. Wall, that “discourages many attorneys from representing retirees, veterans, or families living on a modest income,” because they know that “the best possible payout is unlikely to cover even the cost of the case.”20 Ms. Wall also finds fault with the ER immunity provision of the law, which she said “takes away the rights of patients injured or killed in any of Georgia’s emergency rooms because of clear negligence.”21

Governor Perdue ostensibly disagrees. On Jan. 13, 2009, he announced a new plan “which builds on [the] landmark tort reform legislation enacted in 2005.”22 The plan includes improved protections from spurious lawsuits for pharmaceutical and health care companies, if their products have been tested and approved by the U.S. Food and Drug Administration.23 The plan also includes a “loser pays” provision that requires the non-prevailing party to pay the prevailing party legal fees in cases that are dismissed early in the litigation (prior to the completion of the discovery process, unlike S.B. 3’s loser pays provision).24 The U.S. tort costs are reportedly more than twice that of Germany and three times as high as those in France and the United Kingdom, where “loser pay” laws are currently enforced. 25

According to the Atlanta Journal Constitution’s Maureen Downey, there are “four compelling reasons why Gov. Sonny Perdue’s proposal to create a liability-free haven for drugmakers (sic) threatens the welfare of Georgians – Vioxx, Rezulin, fen-phen and Bextra.”26 All those drugs were FDA approved, and all were taken off the market after causing problems that ranged from hypertension and stroke to liver failure and death.27 As Ms. Downey notes, FDA approval does not guarantee drug safety, and the associated risk, she suggests, should fall on the pharmaceutical companies, not the patients.28 Under Gov. Perdue’s plan, she says, “consumers bear all the risk.”29

According to Jay Cook, president of the board of directors of the Georgia Civil Justice Foundation and a past president of the State Bar of Georgia, Gov. Perdue’s bill has “rulebook rigging written all over it,” a term Mr. Cook explains connotes “industries or special interest groups that try to game the system so they can legalize putting profits ahead of public safety.”30 America’s founding fathers, Mr. Cook insists, must be “rolling in their graves.”31 They gave us the legacy of civil juries, according to past President Cook, for the promotion of public trust and safety “and to keep our rights from being trampled by tyrants with too much power and money and too little humanity.”32 He recalled the words of James Madison, in particular, when he said, “If men were angels[,] we would need no government.”33 His advice – “stop listening to the fear-mongering flim-flam of rulebook riggers and start seeing the game for what it really is: a con to pocket higher profits at the expense of our safety and sacred right to liberty and justice for all.”34

For most Georgians, the swim to one side or the other often requires wading through the agendas of pontificating politicians, bloviating barristers, and prevaricating pundits. That is not to say that all politicians are preachy, or that all barristers are boastful, or that all pundits equivocate, but let’s be honest – many are, and do. The goal for the citizens of this great state is to find the fissures of truth in the torrents of mud that have come to define this political quagmire.

The channels through which Georgians must wade to uncover the facts – to find those undeniable truths that will guide them in the direction best suited to protect this state’s citizenry – are vast and unremitting. There are no easy answers. Even the best and the brightest struggle with the deluge of data and party line propaganda available on the worldwide web and in other news media.

Among my own family, dissonance abounds. My father, whose background is a confluence of the spiritual, legal, and academic (a rabbi, JD, and PhD), recently commented that excessive tort judgments are a pretext relied upon by insurance companies to justify the outrageous costs of medical malpractice insurance that doctors like my brother and my sister have to pay. When I shared my father’s comment with my dear husband, he respectfully retorted, “Well, maybe it’s time that we take away their pretext.” My advice to Georgians: Elude the ruse, shun the spurious, unearth the essentials, and add your voice to the dialogue. The answers will come.

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1 “Obama’s Medical-Malpractice Opportunity,” by John P. Avlon, September 9, 2009, www.city-journal.org/2009/eon0909ja.htmlwww.city-journal.org/2009/eon0909ja.html.
2 Id.
3 American Tort Reform Association website: www.atra.org/wrap/files.cgi/7963_howtortreform.htmlwww.atra.org/wrap/files.cgi/7963_howtortreform.html
4 Id.
5 Id.
6 Id.
7 “Georgia Tort Reform: Both Passed and Pending,” by Ted Frank, March 15, 2005, www.pointoflaw.com/archives/001026.phpwww.pointoflaw.com/archives/001026.php
8 Deleted.
9 American Tort Reform Association website: www.atra.org/states/GA
10 Id.
11OCGA § 51-12-5.1(f)(g)
12 AAJ: ‘Patient’s Rights Aren’t Bargaining Chips,” by Anthony Tarracone, September 4, 2009, American Association of Justice website: www.justice.org/cps/rde/xchg/justice/hs.xsl/10380.htm.
13 Id.
14 “Trying to Regain PR Footing on Health Care Reform, by Carter Wood, September 5, 2009, PointofLaw.com website: www.mbnlaw.com/our-thoughts/2009/8/20/georgia-tort-reform-scorecard.htm.
16 Allison Wall, “Tort “Reform” in Georgia: Dispelling the Myth,” September 20, 2006, TortDeform.com website: www.tortdeform.com/archives/2006/09/tort_reform_in_georgia_dispell.html.
17 Id.
18 Id.
19 Id.
20 Id.
21 Id.
22 “Should Georgia limit liability for drug companies? PRO,” Atlanta Journal Constitution, by Dan Pero, Atlanta Journal Constitution, February 3, 2009.
23 Id.
24 Id.
25 Id.
26 “Drugmaker Immunity is a Poison Pill,” Atlanta Journal Constitution, by Maureen Downey, Atlanta Journal Constitution, January 14, 2009.
27 Id.
28 Id.
29 Id.
30 “Should Georgia Limit Liability for Drug Companies CON,” Atlanta Journal Constitution, by Jay Cook, February 3, 2009.
31 Id.
32 Id.
33 Id.
34 Id.