Under the “American Rule” for attorneys’ fees, each party is responsible for paying for his or her own legal fees, irrespective of which party is ultimately victorious. However, certain federal and state laws do permit the shifting of attorneys’ fees in certain circumstances. Many of these statutes are designed to incentivize those with clearly meritorious claims to vindicate their rights without worrying about the cost of legal services. However, some fee-shifting statutes incentivize a plaintiff to settle with a willing defendant or risk being held liable for the defendant’s attorneys’ fees should he or she lose at trial. One such “offer-of-settlement” statute, O.C.G.A. § 9-11-68 (b)(1), is the principal topic of discussion in a recent decision from the Georgia Court of Appeals, Crane Composites, Inc. v. Wayne Farms, LLC, in which the court needed to determine whether the statute applied to a negligence claim that had accrued prior to the effective date of the legislation.
The statute generally provides that if a defendant makes an offer of settlement and the plaintiff rejects that offer, the plaintiff will be accountable for paying the defendants’ reasonable attorneys’ fees from the date the offer is rejected until the entry of judgment if the judgment is a finding of no liability for the defendant, or the amount recovered by the plaintiff is less than 75% of the offer of settlement amount.