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Georgia small-business witnesses urge tort reform, say litigation and insurance costs are harming firms
Summary
Business owners and industry representatives told the Small Business Development committee that a litigious environment and rising insurance premiums are imposing large legal and operating costs on small firms and urged support for the governor's tort reform initiative.
Small-business owners and industry representatives told the Georgia Small Business Development committee that litigation and rising insurance costs are a major obstacle to growth and urged lawmakers to support the governor's tort reform initiative.
The testimony focused on how plaintiffs'side suits, third-party litigation funding and large jury awards can drag small firms into expensive legal fights even when investigations find no fault. "We get dragged in as a consultant to the developer as a third party defendant," said Daryl Rochester, owner of Rochester DCCM, describing cases in which his civil engineering and land-surveying firm has been pulled into suits aimed at developers. Rochester said the company spent about $200,000 in legal fees and related labor over the past five years defending such claims.
Why it matters: Witnesses said the cost of defending against lawsuits and the threat of large settlements push up insurance premiums and can threaten small firms' viability. Several speakers connected those trends to the governor's proposed tort reform bill and asked lawmakers to act.
Rochester described a recent case in which the state Environmental Protection Division inspected a site and "twice...came back and said that we find no fault on the developer or the development whatsoever," yet the matter nonetheless settled. He said his firm was on the hook for part of a roughly $1.3 million settlement and paid "$57,000 of that...directly out of our pockets," with the remainder covered by insurance deductibles.
Brian Macon, president of Dorset Industries, a Dalton-based manufacturer, said the governor's proposal is "a good beginning" but should go further. "We have a target on our backs, and they are shooting at us," Macon said, arguing for caps on punitive damages and limits that would make it harder for frivolous suits or litigation funding to drive settlements.
Lawmakers who questioned witnesses emphasized concerns about rising insurance costs. Representative Tarvin said fraudulent claims and the resulting market changes have increased costs for consumers and businesses alike and said tort reform "may help that some." Several witnesses reported steep premium increases: Rochester said his property insurance rose about 45% in two years; other witnesses reported premium increases in the 20% range.
Speakers urged a range of responses, including limits on certain jury awards, tighter scrutiny of third-party litigation funding, and clearer rules around venue and damages. No formal vote or committee action on any bill was recorded in the transcript excerpt.
Ending: Witnesses told the committee they hope tort reform will reduce frivolous suits and lower insurance costs; at the same time, several lawmakers and commenters raised concerns about how caps or limits should be calibrated for severe or lifetime injuries.
