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Monday, March 6, 2006

Fee Shifting in Georgia

An unintended consequence of tort reform in a sexual assault case?  A woman has sued three people involved in an alleged sexual assault:

The incident occurred on Feb. 16, 2002, when the victim attended a party with about 20 other teens and passed out after having too much to drink. When she awoke, she found obscenities written on her body and a sexually explicit drawing on her face. She left quickly, unaware she had been sexually assaulted. But later that week at school, details of the assault emerged as students who had witnessed the incident came forward.

Three people involved were arrested; she has sued all three...

With the case headed toward trial, Ignotz's lawyer recently offered to settle the case for $35,000 and Cate's attorney offered $10,000, the victim's lawyer, Michael Sullivan, said. Shipp has not responded to the lawsuit.

* * *

But one provision of the Tort Reform Act of 2005 says that even if the victim wins at trial, she can be forced to pay Ignotz's and Cate's attorneys' fees if the jury does not award damages that are at least 25 percent more than the offers.

One legislator has introduced changing the formula from fee-shifting if the verdict is less than 125% of the offer to fee-shifting if the verdict is less than 75% of the offer, and the provision is under constitutional challenge as well.

(Another provision of the Georgia tort reform statute was struck down last month.)

http://lawprofessors.typepad.com/tortsprof/2006/03/fee_shifting_in.html

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Comments

The case described in the article does not give rise to an unintended consequence of the statute. Rather, the (potential) result is an intended consequence. The goal was to force plaintiffs to settle cases or risk financial penalties.

The article merely puts a human face on a law which is doing exactly what it was designed to do.

Posted by: John Day | Mar 7, 2006 4:17:45 AM

Unless it has only limited application that I'm not aware of, there is a law like this in Michigan as well. It's been around for years.

Posted by: lawgeekgurl | Mar 7, 2006 6:26:52 AM

John:

A fair point. I took the term from the article, but you're right -- it's working exactly as intended; it just happens to be in a case where people might be uncomfortable about it.

LawGeekGurl:

Didn't know that. I've seen plenty of offer-of-judgment rules (including FRCP 68, of course) that just shift costs after the offer; I take it that this one encompasses all attorney fees, both pre- and post-offer.

Posted by: Bill Childs | Mar 7, 2006 6:55:08 AM

lawgeekgirl is correct about Michigan - except the Michigan statute works both ways (i.e. it fee shifts to defendants as well as plaintiffs), the "swing" is 10%, and the magic number comes not from a party but rather from a neutral.

At least, that is what I remember about MI law the last time I looked at it 14 years ago.

Posted by: John Day | Mar 7, 2006 6:49:52 PM

I have to say that I litigate in Michigan so infrequently that I can never remember the specifics other than attorney fees are recoverable, although it may be just post-offer, as you say. The idea being to incentivize people to settle in mediation, I suppose. I know they have a hella percentage on post-judgment interest. I think it's higher than my credit card rate!

Posted by: lawgeekgurl | Mar 8, 2006 6:19:18 PM

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