Georgia “Loser Pays” Rule # 5 – Bad Faith, Stubborn Litigiousness, Undue Trouble and Expense

The oldest of the five “loser pays” rules in existing Georgia law has been in effect for nearly 150 years, having first appeared in the Code of 1863.

That Code was largely the work product of Thomas R. R. Cobb, son-in-law of Chief Justice Lumpkin and a foremost Georgia legal scholar of his day. He was a Confederate brigadier general who died at the Battle of  Fredericksburg only a couple of weeks before the Code for which he was largely responsible went into effect. His home in Athens is now operated as a museum.

Thomas Cobb’s “loser pays” rule, now recodified at O.C.G.A. Section 13-6-11, 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.

The “bad faith” prong requires bad faith in the transaction from which the lawsuit arises. Bad faith requires more than bad judgment or negligence. Rather, the statute requires a dishonest purpose or some “moral obliquity” and implies “conscious doing of wrong” and a “breach of known duty through some motive of interest of ill will.”

The “stubbornly litigious” and “unnecessary trouble and expense” prongs of the statute require more than mere refusal to pay a just debt. If there is a bona fide controversy about liability or the amount of damages, fees and expenses cannot be recovered under these prongs.

Whether or not a bona fide controversy exists, for purposes of determining whether a plaintiff is entitled to award of attorney fees on grounds that opposing party has been stubbornly litigious or has caused the plaintiff unnecessary trouble and expense, is normally matter for jury to decide. It is for the jury to determine whether there was a bona fide controversy unless the facts preclude such a finding as a matter of law.

I do not suggest adding yet another “loser pays” provision to the five already included in Georgia law. My opinion, based on 35 years experience practicing law in Georgia for both plaintiffs and defendants, is that our five existing “loser pays” rules are enough.  We need a sixth “loser pays” rule about as much as we need a sixth law school in Georgia. However, if it were deemed necessary to do so for purely political reasons, perhaps one approach could be to make OCGA 9-11-68 available to defendants as well as plaintiffs. If that were done, both plaintiffs and defendants could be held accountable for bad faith in the underlying transaction, stubborn litigiousness, and causing the other party undue trouble and expense.

See summary post, “Does Georgia need more than five ‘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.