Legal Alerts

New Georgia Law Alters Landscape for Settlement Offers in MVA Cases, Provides Bad Faith Safe Harbor

Atlanta, Ga. (May 14, 2024) – On April 22, 2024, Georgia Governor Brian Kemp signed Senate Bill 83, which makes significant changes to the language of O.C.G.A. § 9-11-67.1. The changes in the statute apply to “any offers to settle a tort claim for personal injury, bodily injury, or death arising from a motor vehicle collision made on or after the date this Act is approved by the Governor[.]”

There are several significant changes in the new statute. First, the statute states that “[a]ny offer to settle a tort claim for personal injury, bodily injury, or death arising from a motor vehicle collision shall be an offer to enter into a bilateral contract.” This is significant because under the old statute, Georgia courts held that offers could be unilateral contracts that could require acceptance by performing an act, rather than a communication. That resulted in courts finding there was no settlement agreement when an insurer stated their intent to accept, but failed to perform all the acts required by an offer. Now that all offers are bilateral contracts, courts should be able to enforce settlement agreements where the parties express their mutual intent to be bound.

Second, the statute clarifies that it applies to “any offer to settle a tort claim for personal injury, bodily injury, or death arising from a motor vehicle collision and prepared by or with the assistance of an attorney on behalf of a claimant or claimants” “[f]rom the time a cause of action accrues until the filing of an answer by the named defendant, or if there are multiple named defendants, until the time that all named defendants have filed their initial answers or been found to be in default, whichever is applicable…” Thus, from the moment of the accident until all the answers have been filed in the lawsuit, this statute controls all offers to settle sent by attorneys.

Third, the statute now defines which material terms are permitted to be included in an offer to settle sent by an attorney. The list is exhaustive and any other terms or required acts are “immaterial” for the purpose of establishing a negligent failure to settle claim, assuming the insurer compiles with the new safe harbor provision (discussed below). The only material terms that may be included in an offer to settle are:

  • A date by which the offer must be accepted. This date must be at least 30 days from receipt. The offer still must be sent by certified mail or statutory overnight delivery.
  • The offer must include the amount of monetary payment demanded.
  • The offer must identify the parties to be released, the type of release offered, and the claims to be released.
  • A date by which payment shall be delivered, provided it is not less than 40 days from receipt.
  • A statement under oath whether all liability and casualty insurance has been disclosed that must be delivered within 40 days of receipt of the offer. However, this statement under oath can be waived by the offeror.

Fourth, the statute also states that recipients have the right to seek clarification “regarding the terms, the terms of the release, liens, subrogation claims, standing to release claims, medical bills, medical records, and other relevant facts.” However, any such clarification must be in writing and will not be deemed a counteroffer unless it seeks to change the material terms set out in the statute. The statute also continues to provide that if a release is not provided with the offer, the provision of a proposed release is not a counteroffer.

Fifth, the revision creates a safe harbor for insurers when any term or required act deviates from the exhaustive list above. While additional terms may be present in any demand, the statute now explicitly states that the failure to comply with an immaterial term does not give rise to an alleged negligent failure to settle claim if a recipient, on or before the dates specified in the offer, complies with the following:

  • Provides a writing that purports to accept the material terms of the offer in their entirety. 
  • Provides the required statement under oath regarding no additional insurance, if required by the offer.
  • Makes payment, for the lesser of the amount demanded or the available limits of the applicable insurance policy.

There are two additional aspects to the safe harbor provision. First, the safe harbor provision applies to any offer to settle a tort claim for personal injury, bodily injury, or death arising from a motor vehicle collision, not just those subject to the statute. Thus, if the first offer is made at a time when the statute does not control the demand (after all the answers in the lawsuit have been filed), the safe harbor can still be met. Second, it only applies to the first offer to settle, and not any subsequent offer. Thus, insurers will get one shot at the safe harbor provision. If the safe harbor is not met, then it cannot be used in response to any later offers.

Note that the Act permits the sides to bilaterally agree to any additional material terms beyond those contained in this new code section. However, those terms must be agreed to in writing. Further, a condition of a settlement demand cannot be to waive any parts of the new code section. It should also be noted that the statute states that it does not apply to any offers to settle product liability claims.

Practically, the changes to the statute should result in fewer claims that there was no settlement agreement when an insurer agrees to tender its limits but fails to comply with a non-material term. It is important to remember that this statute only applies prior to all answers being filed by named defendants in the lawsuit. Accordingly, any offer received must be reviewed to determine if the statute applies, and to determine the appropriate response.

If you have any questions about the new law, contact the authors of this alert. Visit our Insurance Coverage Practice page to learn more about our capabilities in this area.


Seth M. Friedman, Partner and National Co-Chair of Insurance Coverage Practice

Marshall S. Sims, Associate

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