How the 2024 legislative session may impact Georgia businesses

After vowing in August to support new laws aimed at reducing insurance premiums and reining in what he called “frivolous lawsuits” and large jury awards, Gov. Brian Kemp signaled in January that the effort would extend beyond 2024.

Kemp has until May 7 to sign into law or veto bills. Here’s what passed and what’s to come.

Protection for boat rental companies

House Bill 994 sailed through both chambers, eliciting just two opposing votes.

It protects boat rental businesses from liability for injuries or damages caused by the negligence of vessel operators. Exceptions apply, in case a rental company leases a boat that’s not fit for use or to someone deemed unsafe.

Rep. Alan Powell, R-Hartwell, the bill’s main sponsor, said during a Feb. 21 House debate that Georgia’s boat rental businesses and marinas risk of going under if liable for the acts of operators.

“You would think that those people, the operators who lease the boat, would be liable for their own errors if there’s a tort or something that happens,” Powell said. “But no, the owner of the boat is the one that bears full responsibility.”

Powell said Georgia is one of three states that impose liability on boat rental services for operator error.

Under the bill, boat rental businesses are required to carry insurance and remain responsible for any problem they directly cause.

“They’ve got to check out the operator to make sure they don’t rent (a boat) to a bunch of college boys showing up at the lake with a pick-up truck full of beer,” Powell said. “It’s basically a common-sense bill. And they have to clearly post to the people who lease a boat that you’re responsible for your own liability.”

Credit: Arvin Temkar/AJC

Credit: Arvin Temkar/AJC

Atlanta attorney Laurie Webb Daniel, who was involved in the defense of a $200 million civil case over the death of a 7-year-old boy in a boating accident on Georgia’s Lake Burton, said large verdicts can be a hardship on rental companies. In that case, the business that rented a boat to the child’s family settled the claims against it; the boat manufacturer was found partly liable.

Removing insurers from trucking-related suits

Senate Bill 426 would bar plaintiffs from directly suing the insurer of a motor carrier in cases related to the operation of a commercial vehicle, with few exceptions. It received overwhelming bipartisan support.

Advocates say it will reduce litigation costs for insurers and insurance costs for trucking firms. Jury verdicts, supporters say, swell when insurers are seen in court footing the bill.

“I’ve seen that happen,” said Webb Daniel, whose practice includes defending insurance companies. “The juries think it’s free money.”

Morris Manning & Martin lawyers Seslee Smith and Ryan Burke, who specialize in insurance law and litigation, said insurers’ coverage obligations won’t change under the bill, which will simply serve to keep insurers in the background. That’s how it is with lawsuits arising from non-commercial vehicle wrecks and in most other tort cases, they said.

The law has been around since the late 1930s, when it was harder to pin down the owners and drivers of trucks, Smith said. Since then, industry regulations and technology have aided plaintiffs.

“It’s not taking away any rights that an injured party or plaintiff would have,” Smith said. “It’s just (changing) the structure of how the legal proceeding would go forward.”

Georgia is one of four states that allow direct actions against the insurers of commercial vehicle operators, Emory University law professor Joanna Shepherd said. Evidence shows “insurance companies do charge higher prices when they expect to be involved in more litigation,” she said.

Potential downsides of the bill include that it might make it harder for some plaintiffs to get compensation and force some motor carriers to pay defense costs upfront, Shepherd said. She said she believes that “in the vast majority of cases, we won’t see a problem.”

Atlanta car accident attorney Ted Spaulding isn’t convinced. The need to protect the public from reckless or negligent commercial drivers outweighs the benefits to insurers that SB 426 would bring, he said.

“It is about trying to keep jury verdicts as low as possible by not being able to mention there is an insurance company involved,” Spaulding said. “Everybody loves the idea of lower insurance rates until it is their family member who is killed due to a negligent driver. Then they want the company to pay.”

Earlier efforts to kill the direct action statute have failed and Burke called SB 426 “a compromise” that keeps in place direct suits in limited circumstances, such as when a trucking company is insolvent or bankrupt.

Smith and Burke said the costs insurers bear when sued directly ultimately get passed to consumers. The law change might even bring into the market insurers who otherwise avoided Georgia’s direct action statute, Burke said.

Limiting landowner responsibility fails

The effect Senate Bill 186 would have on personal injury cases against property owners stemming from crime on their premises is likely the reason that it failed to progress to a vote during the session, legal experts say.

Dubbed the Georgia Landowners Protection Act, the bill largely frees property owners from liability when injury on their premises is caused by a third party’s conduct, unless the landowner had direct knowledge of the specific harm and could have reasonably prevented it. The fact that prior crimes had occurred on or near a landowner’s property doesn’t factor into their responsibility under the measure, in a stark departure from existing state law.

Shepherd and Eric Larson, a commercial litigation partner at Morris Manning, said lawmakers may soften the bill to get it approved in the next session.

“The way it’s written right now, it seems extremely difficult for a plaintiff to prevail,” Shepherd said. “I think it goes much too far.”

The bill follows a June 2023 decision of the Georgia Supreme Court in civil cases about shootings in the parking lots of an Atlanta CVS pharmacy and the Pappadeaux Seafood Kitchen in Marietta. The court held that prior crimes on and near the properties could be considered in determining whether the business owners could have reasonably foreseen the shootings and improved on-site security.