Trucking Ahead: Limiting Georgia’s Direct-Action Statutes
By: Lisa Northrop
Georgia is one of a small minority of states that permits plaintiffs to name an insurance company as a defendant in a lawsuit arising from a motor vehicle accident involving a motor carrier, even though there is no independent cause of action against the insurer. However, a plaintiff’s ability to include an insurance company as a defendant will soon be limited.
In early May of this year, Governor Kemp signed into law Senate Bill 426,1 amending Georgia’s Direct-Action statutes2 to only allow for an insurance carrier to be named as a defendant in a trucking lawsuit in two scenarios: when at least one of the motor carriers in the case is insolvent or bankrupt; or if personal service cannot be effected against the truck driver or motor carrier after reasonable diligence. The new law will take effect on July 1, 2024, and apply to all causes of action accruing on or after July 1, 2024. It will not apply retroactively to accidents occurring before July 1, 2024.
Sponsored by State Senator and plaintiffs’ attorney Blake Tillery, Senate Bill 426 was considered by many to be a compromise between proponents of tort reform and plaintiffs’ advocates. The Georgia General Assembly overwhelmingly passed Senate Bill 426 in March 2024.3 The bill’s introduction followed meetings of a Georgia Senate Study Committee conducted in late 2023 to discuss statewide truck driver shortages, where the impact of Georgia’s Direct-Action statutes on the trucking economy was a topic of discussion.4
Earlier last year, a bill was introduced in the Georgia Senate to repeal Georgia’s Direct-Action statutes entirely; however, the bill was ultimately tabled before moving to the House of Representatives for review.5 Criticisms of the 2023 proposed legislation included concerns about the plaintiffs’ recoverability in cases where the truck driver and/or motor carrier are insolvent or unable to be located.
The long-term effects of Senate Bill 426 on trucking litigation remain to be seen. Historically, a primary concern for defendants in trucking cases centered on the potential for an inflated verdict due to a “big money” insurance company being listed on a verdict form. Many hope the eradication of insurance company defendants will result in lower verdicts with benefits being seen by “mom-and-pop” trucking companies with whom jurors may empathize more so than insurer defendants.
Nonetheless, the caveats contained in Senate Bill 426 for the continued addition of insurers to trucking litigation in certain cases may prove thorny. According to the bill’s language, a plaintiff may join an insurance carrier in one of the two above-referenced scenarios “as a matter of right, without motion or order of the court, by filing an amended complaint joining the insurance carrier.”
This tends to suggest there is no requirement for a plaintiff prove to the court either scenario is invoked before adding an insurance carrier to the litigation. Seemingly, this would place the burden on the defense to argue the involved motor carrier is solvent or that reasonable diligence was not used in attempting to serve the driver or motor carrier. Furthermore, it is unclear from the language of the bill what constitutes “reasonable diligence” when attempting to serve the driver and motor carrier prior to adding the insurer. As a result, trucking litigation may become even more protracted going forward if parties are forced to file motions and wait for the courts to rule on whether insurance companies have been properly added as defendants in individual cases.
1 S.B. 426, 157th Gen. Assemb. (Ga. 2024).
2 O.C.G.A. §§ 40-1-112 and 40-2-140.
3 Over 92% of the members of the General Assembly voted in favor of Bill 426, with only two Senators voting against it. The remaining members of both the House and Senate were either absent or abstained.
4 Senate Study Committee on Truck Driver Shortages, 157th Gen. Assemb. Sess. 1 (Ga. 2023).
5 S.B. 191, 157th Gen. Assemb. (Ga. 2023).
Attorney Contact Info
Lisa Northrop
lisa.northrop@swiftcurrie.com
404.888.6147