South Carolina is a wonderful place to live, work, and play. The Palmetto State’s family-oriented culture, business-friendly climate, and abundant natural resources have made it an economic powerhouse in the Southeast as growth from other regions continues to flow into our state. In fact, this generation of South Carolinians has been blessed to see some of the largest economic development opportunities in the history of South Carolina come to fruition in just the last twenty years.
While there is much to celebrate in South Carolina, there are some issues that we must address if we want to remain competitive with Georgia, North Carolina, and other nearby states.
South Carolina’s civil liability laws should be updated to reflect the pro-growth, pro-business and pro-fairness values of the people that live here. Changes to the state’s existing joint and several liability laws are needed so that small businesses, and the jobs they create, are able to continue to grow and thrive.
Many South Carolinians might be surprised to learn that under existing state law, a defendant can be held responsible for 100 percent of monetary damages stemming from a lawsuit, even if they were deemed to be only one percent at fault for the harm suffered by a defendant. In fact, plaintiff’s attorneys regularly use these provisions to land sizable verdicts against defendants – often small businesses that may or may not have insurance policies to help cover damages.
Plaintiffs (those suing for damages) may deserve to be compensated for their injury or loss. In fact, most South Carolinians would probably agree that civil lawsuits are an important tool in our judicial system to ensure citizens have recourse for accidents or incidents that may have caused them harm.
However, we currently have a system that often places the majority of the financial burden for these harms on parties that were not majority responsible for the harm suffered. This system places an unfair burden squarely on small businesses. In fact, this extreme financial burden is comparable to a stealth “tax” on businesses. Unfortunately, the proceeds of this tax benefit a small number of plaintiffs’ attorneys in the state at the expense of all hardworking South Carolinians.
The practice of selecting defendants based on their perceived wealth, and not their level of fault in an accident – referred to by plaintiffs’ attorneys as ‘going after the deep pockets’ – causes insurance rates to skyrocket for small businesses that are essential to growth, job creation, and economic success, like trucking companies, construction firms, and restaurants.
A solution recently proposed by Senate President Thomas Alexander and many other members of the South Carolina Senate, the South Carolina Justice Act (S. 533), would change the existing joint and several statute to make clear that defendants less than 50% responsible for an incident or accident are only liable for damages equivalent to their apportionment of fault.
More simply put, if a general contracting firm is deemed to be five percent at fault in a lawsuit, the business will then owe five percent of the total damages awarded by a jury. So, if the jury awards damages of $100, they will owe $5.
South Carolina’s small businesses are not asking for a handout or special treatment, nor do we wish to let anyone off the hook if they have caused harm. We only want a fair system so that we can stay in business and continue to employ our hardworking, deserving, and dedicated employees.
I urge South Carolinians, especially small business owners and those employed by small businesses, to support this legislation and encourage your state legislators to support it as well.
Without it, businesses will continue to be on the hook for massive damages that put employees’ jobs at risk based on the actions of others beyond their control.
After all, there is a saying in the South Carolina business community: “We’re only one lawsuit away from going out of business.”
ABOUT THE AUTHOR …
Paul Edwards is the business development manager at Reeves Construction Company in South Carolina.
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Let’s create a list of “small businesses” in South Carolina that have gone out of business because they had to pay huge sums when they were 1% at fault. Oh, forget the list, just name one. The insurance lobby just scored in Florida, and apparently South Carolina is next. C’mon let’s see some case studies.