Georgia Supreme Court strikes down medical malpractice damages cap

On March 22, 2010 the Georgia Supreme Court, in Atlanta Oculoplastic Surgery v. Nestlehutt, struck down as unconstitutional Georgia’s statutory limitation on non-economic damages in medical malpractice actions.     Georgia had adopted a cap of $350,000 on non-economic damages in any action (including wrongful death) for medical malpractice cases as part of its 2005 tort reform statute. (S.B. 3).   

The 2005 bill enacted a number of measures intended to reduce both the incidence of and decrease the cost of litigation.  In addition to the $350,000 cap on non-economic damages, the bill also included increased standards of proof for certain medical malpractice claims, and a loser-pays offer of judgment rule.

The Court upheld the ruling of the trial court, that the statute was unconstitutional in light of Georgia’s constitutional provision that “[t]he right to a trial by jury shall remain inviolate.” (Ga. Const. of 1983, Art. I., Sec. 1, Par XI(a)).   The Court’s opinion, which was unanimous, looked to prior Georgia cases interpreting Georgia’s unique “right to trial” provision, finding that they prohibited statutory limitations on the right to trial in cases where the common law had permitted a plaintiff to have a trial.  The Court found that a cause of action for medical malpractice was well-established prior to the adoption of Georgia’s Constitution and was, therefore, a right that could not be limited by statute.

Earlier in the month, the Georgia Supreme Court upheld two provisions of the state’s 2005 tort reform statute.  In Smith v. Baptiste the court upheld an offer of judgment rule (codified at O.C.G.A. 9-11-68) that allows a defendant in a tort case to ‘shift’ its attorneys fees to the plaintiff if the plaintiff refuses to accept an offer of settlement and ultimately fails to recover more than the amount offered.    And in Gliemmo v. Cousineau the court upheld the Georgia statute’s limitation of liability for emergency room doctors which limits liability only to claims resulting from “gross negligence only as shown by clear and convincing evidence.”

Merlinos & Associates can help you assess the effects of tort reform rulings in your business, including reserving and pricing issues.  See our Areas of Expertise for more details.