Does Georgia Really Need More Than Five “Loser Pays” Rules?

Do advocates of more “loser pays” rules offer a solution in search of a problem?

Are people unaware of the “loser pays” sanctions that are already part of Georgia law?

As discussed in previous posts, Georgia already has five statutory “loser pays” rules, four of which passed in tort reform legislation during the time I have been practicing law, and one we have had since the Civil War. Georgia needs a sixth “loser pays” about as much as it needs a sixth law school at a time when graduates of the existing law schools have a really hard time finding jobs.

Georgia’s five “loser pays” rules are:

1. Offer of judgment / offer of settlement. O.C.G.A. § 9-11-68, passed as part of the 2005 tort reform legislation, provides for an award of attorney fees and expenses against a party that refuses to accept a settlement  offer and at trial does not improve upon the rejected offer by at least 25%.
2. Post-verdict jury award due to frivolous claim or defense. O.C.G.A. § 9-11-68(e), also part of the 2005 tort reform legislation, provides a remedy to recover “reasonable and necessary attorney’s fees and expenses of litigation.” Upon motion of the prevailing party when a verdict or judgment is rendered, in a bifurcated proceeding the finder of fact may determine whether the opposing party had presented a frivolous claim or defense, and then award damages against the party presenting the frivolous claim or defense.
3. Motion for fees and expenses where claim or defense was without substantial justification. O.C.G.A. § 9-15-14, enacted in 1986 tort reform legislation, provides for a motion for award of fees and expenses against a party that had asserted a claim or defense “that lacked substantial justification or that the action, or any part thereof, was interposed for delay or  harassment, or if it finds that an attorney or party unnecessarily expanded the proceeding by other improper conduct, including, but not limited to, abuses of discovery procedures.”
4. Abusive litigation tort claim.  O.C.G.A. §§ 51-7-80 et seq., enacted in 1989 tort reform legislation, created a statutory tort of abusive litigation giving rise to liability against “any person who takes an active part in the initiation, continuation, or procurement of civil proceedings against another . . . if such person acts [w]ith malice; and [w]ithout substantial justification.” The claim for abusive litigation is initiated by a notice, with statutory proof of delivery, giving the other party an opportunity to voluntarily drop the allegedly abusive claim,defense, motion or position.
5. Code of 1863 – claim for fees and expenses due to bad faith, stubborn litigiousness, unneccessary trouble and expense. OCGA § 9-6-11, which has been in Georgia law since its enactment with the Code of 1863, provides for an award of attorney fees and expenses of litigation against a party who has acted in bad faith, has been stubbornly litigious, or has caused unnecessary trouble and expense.

I’ve always heard that if it ain’t broke, don’t fix it. Five “loser pays” rules is enough. Short of automatically taking the home and first-born child of anyone who loses in court, what more can anyone ask in the way of “loser pays” rules?

Ken Shigley is immediate past president of the State Bar of Georgia and current chair of the board of the Institute for Continuing Legal Education in Georgia. Lead author of Georgia Law of Torts: Trial Preparation & Practice (West, 2010-12), he has an AV Preeminent rating in Martindale-Hubbell Law Directory and Bar Register of Preeminent Lawyers, double board certification in Civil Trial Advocacy and Civil Pretrial Advocacy from the National Board of Legal Specialty Certification (formerly National Board of Trial Advocacy). In addition, he is listed in Super Lawyers (Atlanta Magazine), Legal Elite (Georgia Trend) and Who’s Who in Law (Atlanta Business Chronicle).  In the American Association Justice, he is secretary of the Motor Vehicle, Highway & Premises Liability Section and a board member of the Trucking Litigation Group.