Amendments to O.C.G.A. § 9-11-67.1 and Implications on Pre-Suit Settlement Demands

By: Alex McDonald

Georgia has amended O.C.G.A. § 9-11-67.1, the statute governing pre-suit offers to settle personal injury claims arising from motor vehicle accidents. House Bill 714 was signed into law by Governor Brian Kemp on May 4, 2021, and marks the first time this often-used statute has been revised since its enactment in 2013 to address “set up” tactics that proliferated in the aftermath of Southern General v. Holt, 262 Ga. 267 (1992). The 2021 amendments address ambiguities in the statute, prohibit certain strategies developed by claimants’ attorneys and reverse case law that eroded protections the statute was intended to create. This article summarizes the significant changes to O.C.G.A. § 9-11-67.1 enacted in HB 714.

The 2013 version of the statute set forth five material terms that were required to be included in any settlement offer, including:

  1. The time for acceptance
  2. Monetary amount
  3. Parties to be released
  4. Claims to be released
  5. The form of the release

The same material terms remain after the 2021 amendment. However, subsection (b)(1) now declares that these five material terms (plus a new one discussed below) are the only conditions of acceptance that may be included in a demand without the consent of the recipient in writing. This amendment reverses the Supreme Court of Georgia’s decision in Grange Mutual Cas. Co. v. Woodard, 300 Ga. 848 (2017), which held that an offer could include conditions to acceptance beyond the five listed above. The Grange decision encouraged claimants’ attorneys to always require timely payment and include other problematic terms, such as the preparation of affidavits and other commitments as conditions to acceptance. The most notable impact of this amendment appears to be that the requirement of timely payment may no longer be imposed as a condition of acceptance. Rather, a timely payment requirement is now merely a matter for enforcement of a settlement agreement as contemplated by the dissent in Grange. While claimants’ attorneys may continue to impose additional conditions before a claim is resolved, this is expected to be less common now that the additional conditions will render the offer non-compliant with O.C.G.A. § 9-11-67.1. As a compromise, new subsection (a)(3) permits an offer to require the “recipient” to provide a sworn statement as to whether all insurance “issued by the recipient” has been disclosed.

The revised statute also moves attorneys a step closer to clarity on the effect of including a proposed release along with either the offer or a response. Subsection (d) of the statute provides that “if a release is not provided with an offer to settle, a recipient’s providing of a proposed release shall not be deemed a counteroffer.” This amendment addresses the confusion that arose from appellate decisions, including Pritchard v. Mendoza, 357 Ga. App. 283 (2020) and Turner v. Williamson, 321 Ga. App. 209 (2013), which discussed what happens when the party receiving an offer wants to accept the offer and send a proposed release.

HB 714 now requires that settlement demands “include medical or other records in the offeror’s possession incurred as a result of the subject claim that are sufficient to allow the recipient to evaluate the claim.” This subjective requirement may lead to disputes both before and after a demand expires about whether the demand has included “sufficient” documentation.

The provision governing timely payment in subsection (g) has also been slightly adjusted to allow a period “not less than 40 days” from receipt of the offer to make payment, rather than the 30-plus-10-day requirement included in the 2013 version. This revision will have the practical effect of permitting the recipient to accept in advance of the deadline without starting a 10-day clock on delivery of the check.

Finally, the requirements of O.C.G.A. § 9-11-67.1 now apply to offers submitted “prior to the filing of an answer.” Previously, the statute only applied to offers made “prior to the filing of a civil action.” Thus, settlement offers that are submitted after filing of a lawsuit will be required to comply with O.C.G.A. § 9-11-67.1 through such time as an answer is filed.

The revised statute applies to causes of actions arising on or after July 1, 2021, so claimants’ attorneys will continue to utilize the prior version of the statute in issuing settlement demands for claims that arose prior to that date. The statute also continues to apply only to offers “prepared by or with the assistance of an attorney,” so it is not applicable to pro se claimants.

In summary, HB 714 addresses multiple issues that have arisen in litigation regarding pre-suit offers under O.C.G.A. § 9-11-67.1. Insurance companies will find comfort in the amended provisions regarding the terms that may be included in an offer. However, we should expect that claimants’ attorneys will develop new and creative strategies to maximize the potential for bad faith exposure. As in any compromise, both sides are sure to be dissatisfied before long.

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Alex McDonald

The revised statute moves attorneys a step closer to clarity on the effect of including a proposed release along with the offer or a response.
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