Market and Legal Trends for Doing Business in Georgia 2026

Introduction

The interests of consumers and businesses are often at odds. Alarmed by its lead position on a Judicial Hellholes® report, Georgia recently took significant steps to prioritise business interests in litigation. As a result of the newly enacted tort reform measures, Georgia no longer appears on the list. But, as is also often true, the proverbial pendulum has a tendency to swing wide in either direction before settling somewhere in between the extremes.

Specifically, significant tort reform changes – including allowing parties to split trials into liability and damages phases, limitations on damages, and heightened requirements for negligent security claims – benefit both businesses and property owners by theoretically decreasing the risk of large jury verdicts. Similarly, changes to the Georgia corporate code have increased protections for directors and officers through a broader exculpation statute, expanded the jurisdiction of the State-wide Business Court (“Business Court”), and increased ownership requirements for certain shareholder derivative lawsuits. On the other hand, meaningful reform of the Property Owners’ Association Act to benefit homeowners is also afoot. New laws seek to safeguard residential property owners by increasing transparency, accountability and due process. Other developments targeting consumer protection include potential liability for negligent data breach claims and requiring businesses to comply with AI guidelines. Below, we dive deeper.

Georgia Tort Reform Act of 2025: where are we?

Georgia tort reform seeks to reduce litigation costs, deter litigation abuse and decrease so-called nuclear jury verdicts. The promised benefit from the litigation is the stabilisation of insurance costs. Whether the changes will deliver on the promise will depend on how the courts explore, test and interpret the new laws.

• Adjustments to medical damages: one of many insurance-friendly aspects of the tort reform is that it significantly limits special damages for medical and healthcare expenses. It is now up to the jury to determine the “reasonable value” of necessary care, treatment or services, based on the actual amount charged and the amount necessary to satisfy such charges with the plaintiff’s health insurance, regardless of whether the policy will be used and, apparently, without regard to the carriers’ subrogation rights against their insureds. This is a substantial departure from Georgia’s past implementation of the collateral source rule, which permitted plaintiffs to submit their entire medical bill as evidence, but barred defendants from introducing evidence of payments or benefits the plaintiff received from third parties, such as insurance companies. Now, the jury will be able to assess the plaintiff’s actual out-of-pocket expenses, increasing transparency and, thus, likely limiting the award for damages. The premise, which may or may not be true, is that insurance companies raised premiums because of big verdicts.
• Limitations on non-economic damages: Georgia Senate Bill 68 limits the scope and timing of arguments to the jury, and allowable evidence, regarding certain damages, commonly known as pain and suffering. Section 9-10-184 of the Official Code of Georgia Annotated (O.C.G.A.) defines non-economic damages as those recoverable in tort for bodily injury or wrongful death, and for physical or emotional pain and suffering, loss of enjoyment of life, loss of consortium, and injury to reputation. Now, neither party has the opportunity to argue the worth or value of non-economic damages prior to the close of evidence. With this, attorneys entitled to opening and concluding arguments, pursuant to O.C.G.A. Section 9-10-186, face an additional limitation. Specifically, they must argue the same worth or monetary value of non-economic damages in both arguments. Furthermore, this argument must be “rationally related” to the evidence of non-economic damages. However, nowhere in the statue is “rationally related” defined, making it difficult for attorneys to know what evidence they are permitted to reference. This is a corporate (insurance) friendly statute intending to prevent anchoring tactics that encourage a jury to determine the monetary value of pain and suffering by referring to the value of famous works of art, athletes’ salaries or other factors far removed from the claim.
• Trial bifurcation: the statute permits any party to a wrongful death or bodily injury case to elect, via a written demand prior to the entry of the pretrial order, to have the fault of each defendant determined before considering the damages to be awarded. Bifurcation is mandatory unless the other party objects and the court determines that the amount in controversy is less than USD150,000, or where the claimant, in very limited circumstances, would be likely to suffer distress by having to testify twice. In a bifurcated trial, if one or more defendants are determined to be at fault, the trial recommences for a determination of compensatory damages. If compensatory damages are awarded, the trial may recommence for a determination of punitive damages or liability for an amount of attorney fees or other litigation expenses. Bifurcation is thought to be business-friendly because the defendant’s liability is determined before the jury hears more emotional testimony. Bifurcation also makes litigation more expensive for the plaintiff because the trial is longer. And juries do not want to stay for additional litigation. It is too early to see the impact in Georgia. Studies elsewhere have shown that defence verdicts are more likely, but that juries that have already determined liability may tend to award higher damages against the remaining defendants.
• Third-party litigation funding: a consumer-friendly change caused by the tort reform governs third-party litigation funding. Third parties providing litigation funding are bound by new guidelines, all of which are geared toward consumer protection. Third parties must register as litigation financiers with the Georgia Department of Banking and Finance, which will oversee the new process. One qualification for these litigation financiers is that the individual or entity cannot be associated with a hostile foreign adversary. Litigation financiers must utilise litigation financing agreements going forward. Numerous requirements were created for these agreements – namely, a pre-drafted set of disclosures that identifies a consumer’s right to cancellation, the maximum amount the litigation financier may receive, the litigation financier’s inability to make decisions related to the litigation, and the consumer’s right to change legal representation. A violation of any of these new rules regarding litigation funding agreements renders the agreement void and unenforceable.
• Negligent security claims: in reaction to the growing number and size of jury verdicts against property owners and occupiers, and several appellate decisions that decreased the likelihood of summary judgment, Georgia enacted legislation to make it much harder to hold an owner or occupier accountable for injuries sustained on their premises as a result of wrongful conduct by a third party. Plaintiffs now face heightened foreseeability and prior knowledge requirements, as well as other limitations on bringing such a claim. A person may not bring a negligent security claim if they were trespassing, or intended to or were committing a crime, if they were injured on a single-family residence, or if they were injured by either a tenant or the guest of a tenant and eviction proceedings had been initiated against such tenant. Furthermore, owners and occupiers are protected by a rebuttable presumption that an apportionment of fault is unreasonable if they are assigned a greater percentage of fault than the third party. They also have a defence from liability if reasonable efforts were made to contact law enforcement, alerting them of the imminent wrongful conduct. The sweeping changes brought by this new law should dramatically curtail negligent security claims in Georgia.

Attracting businesses to Georgia through Corporate Code changes

On 1 July 2026, numerous changes took effect regarding corporate internal governance and shareholder litigation. Each of these changes will add to the protections Georgia law provides for corporations and their directors and officers.

• Director and officer exculpation: previously, Georgia’s exculpation statute allowed companies to protect directors but not officers from certain legal and financial liability. Following the trend of other states and the Model Business Corporation Act, Georgia extended this statute to enable companies to provide for both director and officer exculpation.
• Expansion of the Business Court: the Business Court, which is often preferred by companies for its expertise and expediency, may see an increase in cases on its docket after these changes take effect, as the subject matter jurisdiction of the Business Court has been expanded to include internal entity claims. In addition, companies can now mandate, via a forum selection clause in their by-laws or Articles of Incorporation, that certain claims be heard in the Business Court.
• Derivative standing: certain publicly traded companies can now require shareholders to meet an ownership threshold of up to 1% of outstanding shares to have derivative standing.
• Disclosure-only claims: these are no longer considered a substantial benefit to the corporation for purposes of awarding attorney fees to plaintiffs in derivative proceedings. This change removes the economic incentives previously associated with supplemental disclosure cases.
• Books and records requests: the definition of a proper purpose was restricted to exclude books and records requests made by shareholders involved in derivative proceedings or other civil litigation against the corporation. Relatedly, if there is a finding that the corporation denied a shareholder’s inspection request in good faith, courts now have discretion to grant or deny a successful shareholder’s request for attorney fees.

Striking a balance between HOA accountability and liability

The boards of homeowners associations (HOAs) generally avoided judicial scrutiny so long as they exercised their authority in a “procedurally fair and reasonable” manner and if their substantive decisions were “made in good faith, and [were] reasonable and not arbitrary and capricious”. However, after hearing of abuses of power, the Georgia legislature recently engaged in significant HOA reform. Given this trend, developers of planned communities, HOAs and property management firms should consider the cumulative impact of HB 220 (2024), the Georgia Property Owners’ Bill of Rights Act (SB 406) and the Georgia HOA Accountability and Community Empowerment Act (HB 62).

• HB 220 (2024): HB 220 went into effect on 1 July 2024 and introduced immediate changes, including a mandatory ten-day written notice before fines or liens can be imposed for violations, retained voting rights for homeowners who are delinquent only in fines (not assessments), and mandatory annual HOA meetings with financial disclosures. Also, when seeking injunctive relief, HOAs need not utilise or exhaust any other available remedies once the ten-day notice period expires.
• SB 406: Georgia legislators had three goals in mind when drafting SB 406, all geared towards providing safeguards for homeowners: transparency, accountability and due process. SB 406 will increase transparency when it goes into effect on 1 January 2027, because HOAs looking to collect fines or fees from homeowners will be required to register annually with the Georgia Secretary of State (“Secretary”) and submit their governing documents. Furthermore, SB 406 creates an administrative process in an attempt to simplify the settlement of disputes between HOAs and homeowners. Instead of hiring an attorney and filing suit, a homeowner may file a complaint directly with the Secretary within 180 days of the HOA’s alleged misconduct. Filing the complaint stops the HOA from collecting disputed fines or fees from the homeowner. A hearing officer will be appointed and will have the discretion to order a hearing with appropriate notice. The hearing officer will issue their findings and conclusions, and the homeowner and the HOA will have 15 days to comply. Appeals may be made to the magistrate court if the claim is within the jurisdictional amount, or to the superior court in all other cases. Finally, SB 406 strengthens due process by increasing the notice requirement for foreclosure liens from 30 days to 60 days and doubling the minimum delinquency amount to USD4,000, consisting only of unpaid assessments. Because filing the complaint stays collection of fines and fees, and the non-prevailing party is only required to pay USD100 to the Secretary, there is a clear potential to abuse the system. Even so, these new laws are expected to curb longstanding abuses of power.
• HB 62: Georgia’s proposed HB 62 focuses on the management aspects of HOAs and highlights the importance of fairness, transparency and accountability. HB 62 increases election oversight by requiring, at a minimum, annual board elections whereby the results are filed with and certified by the Secretary. Furthermore, HB 62 promotes board accountability by requiring board members to be a resident of the community, meaning that they own a unit and list that unit address on their government-issued ID.

Data breaches: could your business now be liable?

A landmark decision from 2025 will surely impact the future of Georgia data breach litigation; see Bland v Urology of Greater Atlanta, LLC, 377 Ga. App. 177 (2025). For the first time, a Georgia appellate court applied a common law duty of care requiring businesses to protect their customers’ personally identifiable information against foreseeable cybersecurity risks. At the motion to dismiss stage, the court permitted the plaintiffs in this putative class action to proceed on their claims – namely, those for negligence and breach of an implied contract to implement data security adequate to protect the privacy of the plaintiffs’ personal information.

Although this case arose in the healthcare industry, the common law duty will apply to any business facing foreseeable risk of data breaches. With data breach crime increasing globally, it will be easy for a plaintiff to plead that a business defendant knew of the importance of the private information and the consequences of a breach. Accordingly, companies should assess cybersecurity risks and implement sufficient safeguards, examine cybersecurity insurance coverages, and consider whether they can disclaim or otherwise limit liability.

Georgia’s first swing at regulating artificial intelligence

As of 1 July 2027, artificial intelligence (AI) operators must comply with the unprecedented SB 540 regarding AI companion chatbots (“AI companions”). There are numerous requirements aimed at protecting all consumers, such as requiring operators to disclose to users that they are interacting with an AI companion, rather than a natural person. In addition, an AI companion may not represent that it is qualified to provide professional services unless its operator is lawfully authorised to provide such services.

There are also a large number of requirements specifically protecting minors. For example, operators must take reasonable measures to prevent AI companions from discussing a list of topics that legislators identified as sensitive. To identify minor users, operators must implement and maintain age assurance methods. While employing age assurance methods, companies must minimise the collection of personal information, keep retention periods short, and refrain from selling any data collected in the process. Once a minor account is identified, there are additional account settings that must be made available to the minor and their parents, such as tools for managing screen time. The Attorney General will enforce these requirements and may do so by bringing civil actions against violators.

Similar to the Protecting Georgia’s Children on Social Media Act (2024), SB 540 may face challenges when it comes to age assurance methods and potential cybersecurity risks. Regardless of the short retention periods, the onus will be on the businesses creating the AI companions to implement sufficient data security measures to protect the personally identifiable information.

Conclusion

As these laws continue to go into effect, the interpretation and enforcement processes will make potential difficulties with compliance clearer and show just how far-reaching the advantages will be for both consumers and businesses in Georgia. The legislature is actively reshaping policy for the future, with an apparent goal of balancing these interests.

A final thought: business likes predictability. Changes in the law – good or bad – create unpredictability. The old adage may prove true, at least in the short term. Be careful what you wish for.