Georgia Lawsuit Climate Ranked Among Nation’s Ten Worst

U.S. Chamber of Commerce Institute for Legal Reform | September 18, 2019

WASHINGTON, D.C.—Georgia’s lawsuit climate remains among the nation’s worst, falling a spot to 41st overall and slipping into the ten worst states in the nation, according to a new national survey released today by the U.S. Chamber Institute for Legal Reform (ILR). This is Georgia’s lowest ranking since the survey’s inception in 2002.

The 2019 Lawsuit Climate Survey: Ranking the States, conducted by renowned polling firm The Harris Poll on behalf of the U.S. Chamber Institute for Legal Reform, questioned senior business executives about the fairness and reasonableness of state court systems.

Factors that likely contribute to the state’s low rank include loopholes that give lawsuit finance companies special advantages, and uneven legal rules that advantage plaintiffs’ lawyers over defendant companies, allowing for outsized jury verdicts.

The poor perception of Georgia’s legal climate is critical because a record-high 89 percent of survey participants said a state’s lawsuit environment is likely to impact their company’s decisions about where to locate or do business.

“Georgia continues on a downward spiral because of a shift at the trial courts to favor plaintiffs’ lawyers and allow massive verdicts,” said Harold Kim, chief operating officer of the U.S. Chamber Institute for Legal Reform. “The state’s appellate courts have acted as a check on trial courts, reversing questionable multi-million dollar verdicts, but it’s not enough. Georgia lawmakers should not let the state become the next trial-lawyer haven by encouraging lawsuit abuse.” 

Possible reasons why Georgia’s ranking is so low include:

• The Georgia Supreme Court has allowed third party litigation funders to avoid the same regulation and oversight that consumer loan businesses must follow.
• Companies and plaintiffs are held to different standards for preserving evidence. Plaintiffs who know a lawsuit might be filed aren’t obligated to keep the same amount of records as a company that is expecting a lawsuit.

Fortunately, Georgia voters know having a fair lawsuit climate will attract more businesses and bring more jobs. Last November, voters approved a constitutional amendment creating a business court designed to quickly resolve complex business litigation. The court will start taking cases in August 2020.

The state legislature could improve Georgia’s lawsuit climate ranking by reining in misleading trial lawyer advertisements and addressing out-of-control punitive damage awards.

The 2019 Lawsuit Climate Survey: Ranking the States is the 12th time The Harris Poll has conducted the survey since 2002 for the U.S. Chamber Institute for Legal Reform. The final results are based on interviews with a national sample of 1,307 in-house general counsel, senior litigators or attorneys, and other senior executives who are knowledgeable about litigation matters at public and private companies with annual revenue of at least $100 million.