SB 108 would allow intimidation and fear to rule our court of law
Atlanta, GA—SB 108, a component of Governor Perdue’s so-called “tort reform” package, seeks to enact a ‘Victim Pays’ provision in Georgia law. Current law dictates that each party in a lawsuit pays its own attorney fees unless specific authority is granted by statute or contract allowing for the assessment of those fees against the other party. This provision is known as the ‘American Rule.’ This uniquely American method distinguishes our Civil Justice System from that of much of Europe which still operates under ‘The English Rule.’
The American Civil Justice System was based on the premise that individuals and small businesses, regardless of their financial means, have the right to seek justice for wrongdoing in a court of law that views each party as completely equal. As our Civil Justice System has matured, the American Rule has been championed as a unique equalizer — it does not discourage a person of little-to-no means from pursuing a meritorious claim — whereas ‘Victim Pays’ acts as a deterrent to individuals harmed through no fault of their own by the negligence of others.
“Governor Perdue has used the term ‘Loser Pays’ to label this provision. Yet nothing could be further from the truth” said Fred Orr, President of the Georgia Trial Lawyers Association. “This provision only affects one party in the suit — the plaintiff. If a large corporate defendant loses a claim, they will never have to pay for the victim’s legal fees under this bill, despite how baseless their defenses were.”
“SB 108 as it is written will harm middle class Georgians and small businesses the most,” said Atlanta attorney Darren Penn. “The very rich can afford legal fees and poor plaintiffs, as a practical matter, will not have to pay either. But, your traditional ‘mom and pop’ businesses and regular middle class Georgians could be bankrupted by the steep fees corporate defense attorneys charge.”
Besides creating real fear and intimidation for Georgians who wish to file suit, SB 108 fails to do much else that isn’t already covered by Georgia law. Besides having sanctions against “frivolous” lawsuits in both state and federal courts already in place, our current ‘American Rule’ operates under a contingency fee system — a natural deterrent against claims with little-to-no merit. Under the contingency fee system, the plaintiff’s lawyer carefully reviews a potential case to decide if he or she will take the case. The attorney fronts the entire cost of pursuing the case out of his or her own pocket — receiving no payment from the client. Both the client and the attorney only get paid if they win in court. In the business world, such expenditures are called ‘research and development.” Just as no business is going to spend money researching and developing a product they know to be worthless, no wise attorney would risk their money and their practice by pursuing a “frivolous” claim in court. The personal financial risk would be too high. SB 108 does nothing to improve that situation and is not needed.
“SB 108 is a procedural “gotcha” that will discourage attempts to resolve technical deficiencies in legitimate claims and will encourage gamesmanship and manipulation of the legal system by corporate defendants, rather than facilitating appropriate resolution of disputes between parties,” stated Penn. “Enacting SB 108 is like taking away David’s slingshot. The party with more money, more power and more control will have the ability to scare David into not taking a shot at all, even when David has a righteous cause.”