ATLANTA – The state Senate unanimously passed a narrowly tailored tort reform bill Thursday, a week after approving broader, more controversial legislation encompassing most of a civil justice system overhaul Gov. Brian Kemp has made his top priority for 2025.
Senate Bill 69, which cleared the Senate 52-0, is aimed at third-party financing of lawsuits, where financiers who are not a party to a case pay the costs of pursuing litigation in exchange for a portion of any judgement a plaintiff is awarded.
Third-party litigation financing has become a growing concern across the nation, particularly as many are funded through foreign adversaries including China and Russia, Senate President Pro Tempore John Kennedy, the bill’s chief sponsor, said on the Senate floor Thursday.
“This is a consumer protection measure,” said Kennedy, R-Macon. “It is insuring that plaintiffs … are not taken advantage of by bad actors.”
Rather than abolish third-party litigation financing, the bill establishes guardrails to protect plaintiffs entering into such arrangements.
The legislation would prohibit third-party financiers from recovering any awards that are greater than what the plaintiff receives. Contracts between plaintiffs and third-party financiers would have to be in writing and would be subject to cancellation.
Third-party financiers would have to register with the state, and the bill would put limits on foreign adversaries becoming financiers.
Kennedy warned that foreign parties could steal American intellectual property by entering into litigation financing agreements.
“It gives them a foothold into our civil justice system that could give them access to information they otherwise wouldn’t be able to have,” he said. “Think data. Think technology.”
The bill now heads to the Georgia House of Representatives.
Meanwhile, the broader bill senators passed last week also now rests with the House.
Senate Bill 68, which passed last Friday primarily along party lines, includes an array of provisions aimed at reining in “runaway” jury awards in civil lawsuits. Kemp and Republican lawmakers blame lawsuits for raising insurance premiums so high that businesses have been forced to lay off workers or close their doors.