By: Andrew Bagley

The Georgia Legislature voted this year to revise portions of O.C.G.A. § 9-11-67.1, Georgia’s pre-suit demand statute, and it could have important consequences when the law goes into effect on July 1, 2021.  

O.C.G.A. § 9-11-67.1 governs the form and substance of “Holt Demands” in Georgia cases involving automobile accidents.  As anyone familiar with insurance defense in Georgia can probably tell you, a Holt Demand is a written, pre-suit letter from a claimant that demands settlement at or below policy limits and states that the claimant will file suit to obtain an excess judgment against the insured if a demand is not met by a specific deadline, usually 30 days.  The name “Holt Demand” comes from the case Southern General Ins. Co. v. Holt, 262 Ga. 267 (1992), which is often cited by the claimant’s attorney in these letters.

The current version of O.C.G.A. § 9-11-67.1, which itself was only signed into law in 2013, provides basic guidelines for how these pre-suit demand letters must be sent.  Pursuant to this statute, the demand must be in writing, sent either by certified or statutory overnight mail, return receipt requested, and contain the following material terms: (1) A 30 day period from the receipt of the offer in which the demand may be accepted; (2) the specific amount being demanded; (3) The specific party or parties to be released; (4) the type of release to be accepted in exchange for payment; and (5) the claims to be released.  This code section also states that the insurance carrier shall have the right to seek clarification regarding the terms, liens, subrogation claims, standing to release claims, medical bills and records, and other relevant facts, and that an attempt to seek “reasonable clarification” on these issues will not be deemed a counteroffer or rejection of the demand.

Under the new bill, known as House Bill No. 714, the statutory scheme for sending pre-suit Holt Demand letters will remain largely the same, but there will be some important differences in when these demands may be sent out and what they must contain.  The current version of O.C.G.A. § 9-11-67.1 only applied to demands made before “the filing of a civil action.”  Once a Complaint is filed, in other words, a claimant’s Demand to Settle is no longer governed by this statute and could contain different terms, such as a faster acceptance deadline.

The new version of O.C.G.A. § 9-11-67.1 will apply to demand letters sent anytime before “the filing of an answer.”  This change will extend the statute’s range beyond pre-suit demand letters, as a claimant will still be required to follow the terms of this statute even after filing suit (and before an Answer is filed). 

The other major change is the addition of Subsection (a)(2), which will require demand letters to 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.”  Previous versions of this statute have not required claimants to produce any documentation supporting their claim.  Practically speaking, this new Subsection should be a welcome change for claims examining professionals. 

This new law will go into effect for any auto accident that occurs on or after July 1, 2021.  Although it will take a few years to see how this new statute works in practice, we anticipate that the changes to the law, overall, will help claims professionals collect and gather information necessary to assess and evaluate these claims during the pre-suit process.