A second part of Georgia Gov. Brian Kemp’s campaign to limit lawsuits and large verdicts won approval Thursday from the state House of Representatives. The full tort reform package should be ready for the governor’s signature in coming weeks.

The bill, which seeks to limit what some have called predatory activity from third parties and foreign adversaries who invest in litigation, won approval in the Senate and bipartisan support in the House, passing 98-69, the Associated Press and other news sites reported. But those moves come as lawmakers grapple with the fallout from political disputes over the first half of the proposal.

Senate Bill 69 requires third-party entities that invest in litigation to register with the Department of Banking and Finance and bans foreign adversaries and governments from investing in litigation, among other reforms. It also aims to limit the amount that funders of litigation can influence civil litigation proceedings and the people involved, AP reported.

“What this bill does is puts regulation and parameters around an industry that is, frankly, wide open at this point,” House Republican Majority Whip Rep. James Burchett said Thursday.

The first part of the package, Senate Bill 68, won narrow final approval in the House last week and contains a series of changes that will overhaul Georgia’s litigation landscape, including limiting when property and business owners can be held accountable for injuries on their property.

Kemp said businesses are struggling to keep up with the costs of frivolous lawsuits and that insurance rates would stabilize with a balanced legal landscape, although the evidence for that is uncertain, the AP reported. Third-party litigation financing has become a multibillion dollar industry, according to the U.S. Chamber of Commerce. It allows hedge funds and other investment groups to finance lawsuits in exchange for a portion of anticipated damages awarded to the plaintiffs.

Supporters of the practice argue that it can expand access for plaintiffs, who may be struggling financially in the wake of an accident that leaves them unable to work or results in large medical bills, the Georgia Recorder noted. National Federation of Independent Business State Director Hunter Loggins praised Georgia lawmakers for passing the legislation, Transport Topics reported. The Georgia Motor Trucking Association also hailed the passage.

Critics have said that it allows private equity groups to exert undue influence over trials, which could add to litigation costs, and may give foreign organizations access to sensitive information. Georgia law doesn’t currently require plaintiffs to disclose the use of outside funding, the news sites noted.

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Lawsuits
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Georgia