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Georgia One Step Closer to Reform



In an attempt to rescue Georgia�s offer of judgment rule from an assault by trial lawyers and sympathetic judges, Republicans in the State House of Representatives have passed a bill that would reform the 2005 offer of judgment rule.

H.B. 239 modifies the 2005 version of the rule to clarify that a defendant can recover its attorneys fees only if the plaintiff rejects an offered judgment and recovers less than 75% of the amount offered.

This reform addresses one of the criticisms leveled by a Georgia trial court in late 2005 (Muenster v. Suh) in striking down the law as unconstitutional. That decision was subsequently settled and not appealed, leaving the law to stand in other courts in the state.

Among other concerns, the trial court claimed that the rule�s language was unclear and could have been interpreted to prevent plaintiffs from making an offer in settlement. The court also correctly noted that the language of the rule (which spoke in terms of a final judgment that was at least 25% greater than the offered judgment) was confusing and difficult to apply.

H.B. 239 keeps the spirit of the 2005 rule alive but uses language far more precise than the original:

(b)(1) If a defendant makes an offer of settlement which is rejected by the plaintiff, the defendant shall be entitled to recover reasonable attorney's fees and expenses of litigation incurred by the defendant or on the defendant's behalf from the date of the rejection of the offer of settlement through the entry of judgment if the final judgment is one of no liability or the final judgment obtained by the plaintiff is less than 75 percent of such offer of settlement.

(2) If a plaintiff makes an offer of settlement which is rejected by the defendant and the plaintiff recovers a final judgment in an amount greater than 125 percent of such offer of settlement, the plaintiff shall be entitled to recover reasonable attorneys fees and expenses of litigation incurred by the plaintiff or on the plaintiff's behalf from the date of the rejection of the offer of settlement through the entry of judgment.

Importantly H.B. 239 does not address one of the other criticisms made by the court in Muenster v. Suh: that the offer of judgment rule applies only to tort cases and not contract cases.

 

 


Rafael Mangual
Project Manager,
Legal Policy
rmangual@manhattan-institute.org

Katherine Lazarski
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.