Georgia House passes ‘direct action’ bill, sending it to Kemp

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(The Center Square) — The Georgia House of Representatives has approved legislation limiting plaintiffs’ ability to sue motor carriers and their insurers simultaneously, a move lawmakers said is imperative to maintain the state’s pro-business climate.

The House approved Senate Bill 426 by a 172-0 margin, sending the measure to Republican Gov. Brian Kemp for his signature. Proponents say the move to bar so-called “direct action” against an insurance company should stabilize and reduce insurance rates.

“With the passage of this bill, we are one step closer to providing Georgia’s growing business community the relief it needs,” Lt. Governor Burt Jones said in a statement. “If we want to continue to be the [No. 1] state in which to do business, we must foster a business-friendly climate. Now, we can help level the playing field when a case reaches the courtroom.”

Under the measure, a plaintiff can include the motor carrier and the insurance provider in the same lawsuit if a motor carrier involved is “insolvent or bankrupt” or unable to serve the vehicle driver or the motor carrier.

“This measure addresses an aspect of tort reform by limiting the ability of plaintiffs to sue motor carriers and their insurers simultaneously,” state Sen. Frank Ginn, R-Athens, said in a column last month. “As we continue to prioritize workforce development, it’s essential that we prioritize tort reform.

“Too many current laws make it easy to file frivolous lawsuits that increase costs for insurance companies and, in turn, needlessly limit economic opportunity across our state,” Ginn added. “By limiting certain lawsuits, we incentivize future entrepreneurs to open their own small businesses.”

A similar measure, Senate Bill 191, failed last year.