The opening weeks of Georgia's legislative session have seen Republican lawmakers make their most forceful push in years to overhaul the state's civil justice system, placing premises liability and third-party litigation funding squarely in their crosshairs.

In a pair of bills — Senate Bills 68 and 69 — legislators backed by the business community and the popular Republican Gov. Brian Kemp aim to check the purported influence of outside funders and hem in the negligent security claims that one litigator called an "albatross" around the state's neck.

On Feb. 10, the two proposals cleared their first hearing with the support of most of the members of the Senate Judiciary Committee. That included votes in favor from Republican trial lawyers on the committee who peppered the bill's sponsor, Republican Sen. John Kennedy, with some of the most pointed questions of the afternoon.

The proposed legislation contains a host of other reforms to Georgia's civil justice system, including allowing parties to demand bifurcation of trials, limits on noneconomic damages, and an end to double recovery of attorney fees.

But defense litigators told Law360 that the negligent security and outside funding elements of the bills are among the marquee proposals on offer. Here, Law360 looks at how Georgia legislators hope to rein them in this year.

'Long Guns on the Front Porch'

Much of S.B. 68's attention is devoted to hemming in negligent security claims, an area of law that attorneys agree is a relatively narrow segment of civil suits, but has received increased attention in recent years thanks to a handful of mammoth verdicts.

Among the most notorious of those is a $45 million verdict won by James Carmichael, who was shot by a gunman in the parking lot of an Atlanta CVS. Carmichael's assailant was never identified, and a jury would place 95% of the blame on the store, ascribing 5% to Carmichael himself, in a ruling eventually upheld by the Supreme Court of Georgia.

When he unveiled his legislative package last month in a speech at the state Capitol, Kemp declared that businesses "should not be held liable for the criminal acts of a third party outside of their control." The line earned one of the biggest rounds of applause of the morning.

S.B. 68 lays out a stricter standard for negligent security claims, saying that property owners and businesses must have a "particularized warning of imminent wrongful conduct by a third person" for an injured party to have a claim.

That proposed standard differs from what the Georgia Supreme Court laid out in 2023, when it upheld the Carmichael verdict, where it said the question is "whether the totality of the circumstances relevant to the premises gave the proprietor sufficient 'reason to anticipate the criminal act.'"

Supporters of the legislation have pitched the bill as a means to lower Georgia's insurance costs, particularly for businesses. Georgians face not only rising rates, but insurers wholly pulling out of the state, said Bryan Cave Leighton Paisner LLP trial attorney Bill Custer.

"The truth of the matter is that the insurance industry has left the Georgia market in material ways. We're like California's property insurance market, in that it just left California, and for a damn good reason. And the commercial and casualty insurance market has largely left Georgia in a lot of different ways," said Custer.

"This small niche of premises liability cases has become such an albatross around the state's neck that it has driven the insurance companies out of the state," he added.

Furthermore, under the bill, the wrongful conduct under the elevated standard must be from the third person — a shooter, for example — "exploiting a specific physical condition of the premises," such as a lack of lighting or a hole in a fence, that was known to the owner.

The bill also sets out a host of exceptions that shield businesses from liability, such as if the injured party was trespassing, was not actually on the premises when they were injured, or committed or planned to commit a felony while on the property.

Georgia plaintiffs' attorneys have protested that the bill would severely curtail their clients' ability to seek justice.

Drew Ashby of Ashby Thelen Lowry, for example, pointed to the cases of sex workers who've tried to sue hotels and motels where they were trafficked as just one type of litigation that could be undermined, going so far as to call the legislation "a pro-human sex trafficking bill" as written.

"I don't know of a single lawyer who can conceive of a case that would fall within the parameters of the way that they seek to revise the law," said Ashby, who has worked in the past with the Georgia Trial Lawyers Association's lobbying efforts.

"It's meant to ensure that there can be no legitimate civil remedy for violence that occurs on properties, including sexual violence, even when the people basically know that it's going on," he added.

But civil defense attorneys deny that the bill tips the scales dramatically in favor of defendants.

"It doesn't impact your garden variety premises liability case, but it does set a specific, higher standard for negligent security cases, particularly like the ones that we've seen lately brought by third parties," Greenberg Traurig LLP shareholder Marcella Ducca said.

"I would certainly say it's a heightened standard ... I think that's a lot more specific. I think that having specific elements is always good for all the parties, for everyone to know exactly what they need to do to prove a claim," she added.

BCLP's Custer pointed to establishments like Atlanta's nightclubs that have resorted to deploying heavily armed guards to secure their property against crimes that could lead to hefty claims. And he lauded portions of the bill that relieve property owners and businesses of liability if they call 911 or otherwise alert law enforcement of an imminent crime.

"This bill goes a long way towards removing shopkeepers from the position they're in now, which is, the only way to protect myself is to have a group of security guards with long guns on the front porch," he added. "That's the natural result of the current law. And I don't think that's good public policy, and I don't think it's fair to shopkeepers."

Defense attorney Bill Mitchell, a managing partner of Cruser Mitchell Novitz Sanchez Gaston & Zimet LLP, said that while the bill is worthwhile — arguing the "pendulum needed to swing back to the middle" — the legislation still contains one "big miss."

That, he argued, is changing the state's bad faith laws, whereby insurance companies can be sued by defendants to cover a verdict if the carrier decided not to settle the case for the policy limit.

"The biggest thing that moves the needles on settlements in Georgia is Georgia's bad faith law, and they decided not to address it or fix it this year," said Mitchell. "And I pay out a lot of money — millions — in cases where I think there's likely no liability, but the excess exposure risk is so big."

Chicken & Egg

S.B. 68's date to the dance, meanwhile, is S.B. 69, which aims to rein in the world of third-party litigation funding.

The bill as written includes an array of measures that its backers argue will increase transparency and curb predatory lending practices. Funders would be barred from directing litigation strategy and offering commissions or referral fees, and would be required to register with the state as a litigation financier.

The bill also sets out a long section of language that must be included in any contracts with plaintiffs, and crucially, allows those funding agreements to be discoverable by the opposing party.

"There's a lot of sentiment right now [for] just understanding who third-party litigation financiers are," said Greenberg Traurig's Ducca. "I think that anything that can be done to shine a light on litigation financing is of interest to individuals, and it's of interest to Georgians. And remember — this is not preventing it. It's just really trying to make sure we know who's doing it."

Victoria Sahani, a law professor at Boston University who studies third-party funding, agreed that the transparency portions of the bill are noble efforts.

"Licensing is a good idea. Like, let's do that. Let's know who the funders are. Let's make sure they're legally allowed to operate in the state," she said.

But she argued that requiring plaintiffs and their financial backers to hand over the entirety of their funding agreements is "a bridge too far," potentially giving defense attorneys enough insight into the plaintiffs' case that it tips the scales of fairness.

Sahani added that one of the most striking pieces of Georgia's proposed legislation is a ban on outside funders from countries designated as foreign adversaries by the U.S. Department of State.

Kemp has pitched the bill as a national security matter, shielding domestic companies from intellectual property theft from foreign firms, an issue the U.S. Chamber of Commerce flagged last year as a growing concern. Sahani, however, said she hasn't seen much evidence it's a problem.

"I have not seen an example. It doesn't mean it's not happening, it just means I haven't seen it," she said. "It's a little bit of a chicken-and-egg problem, which is ... it's not substantiated, and yet, if it was successful in what people are claiming it could do, we wouldn't find it. We wouldn't be able to detect it, in theory."

Sahani added: "None of [the proposals] really get at the makeup of the funder — who owns the funder, who's investing in the funder? And if you're concerned about this hostile, foreign adversaries piece, that's the piece you actually would need."

In years past, Sahani said, business interests tried to drum up support for outlawing litigation funding entirely.

"The defense side, the chamber, and friends sees this as all of a sudden, plaintiffs now have a whole lot more money potentially that they can tap into to be able to stay the course," she said, "but particularly small plaintiffs that would normally be drowned by the resources of the defense side."

But with that ship having sailed, she said, plaintiffs' attorneys and advocates of the funding industry see increased regulations as a means to quietly tamp down the industry's influence.

"The argument is that this is about trying to chill the industry, about trying to make the regulations so burdensome, so expensive, [that they] make it impossible for a funder to actually do business in a way that is profitable," Sahani said. "And therefore they leave a state or leave a jurisdiction, because there's just no way to operate. So there's a perception that this is really about stopping litigation funding without outlawing it."

--Editing by Jay Jackson Jr. and Michael Watanabe.