A new report from a conservative South Carolina think tank is calling for “urgent reform” to the Palmetto State’s liability laws, which it says are “bad for business.”
The report – issued on Monday by the S.C. Policy Council (SCPC) – refocused attention on an issue that has been driving discussion on this media outlet for many months (see here and here). And which, not coincidentaly, is gathering momentum at the S.C. State House. Specifically, it cited “rising insurance rates and a poor legal climate” as potentially jeopardizing “recent economic progress” in the Palmetto State.
“South Carolina is at risk of seeing fewer jobs and less economic growth if the S.C. General Assembly fails to address and reform the state’s civil liability system, which forces businesses to unfairly pay legal claims for damages they did not cause,” SCPC research director Bryce Fiedler noted. “Currently, South Carolina businesses can be forced to pay entire legal verdicts even if they were only partially at fault for an incident, a concept known as ‘joint and several’ liability. Small- and medium-sized companies are at particular risk under this law, and there is concern it will deter them from locating or doing business in our state.”
In the Palmetto State, businesses can be forced to pay 100 percent of a verdict even if they are determined to be only one percent liable for the accident from whence the judgment sprung.
Is that fair? No … but it’s especially pernicious to small businesses, most notably bars and restaurants which provide vital employment lifelines to thousands of low-income workers.
“Select businesses are often targeted because of this law, many of whom face disproportionate and unfair damage awards,” Fiedler noted.
According to the SCPC report (.pdf), South Carolina cannot afford to wait any longer to take action on this issue due to legislative moves being made outside of its borders.
“With other nearby states making efforts to balance their respective legal environments, South Carolina must swiftly reform its civil liability law or risk being left behind,” Fiedler wrote.
Eighteen states – including Florida, Georgia, Kentucky, Mississippi and Tennessee – have largely or entirely abandoned joint and several liability in favor of determining a defendant’s liability based upon their “percentage of fault,” the report noted.
Florida strengthened its tort reforms this spring, while Tennessee amended its joint and several liability law two years to ensure that “no defendant shall be held jointly liable for any damages.” Georgia has already eliminated joint and several liability, but its governor – Brian Kemp – announced in August his intention to pursue additional reforms aimed at addressing frivolous lawsuits against businesses in his state.
“The laws on our books make it too easy to bring frivolous lawsuits against Georgia business owners which drive up the price of insurance and stop new, good-paying jobs from ever coming to communities that need them the most,” Kemp said during an address to the Georgia Chamber of Commerce. “Business owners live in fear of being sued for ridiculous claims on their property.”
RELATED | SOUTH CAROLINA’S VENUE CRISIS
Two bills – H. 3933, S. 533 – would “help reduce the number of businesses forced to pay unfair damage awards in civil cases,” according to SCPS. However, neither bill would “entirely fix the underlying problem.”
A third bill, H. 3053, would completely eliminate joint and several liability and “hold each party liable based on their percentage of fault, while allowing allocation of fault to nonparties.”
H. 3933 was introduced in the S.C. House on February 9, 2023 and referred that same day to the chamber’s judiciary committee, which is chaired by state representative Weston Newton – a lawyer-legislator. Despite having 49 sponsors, it has not moved since then.
S. 533 was introduced on February 14, 2023 and referred that same day to the Senate judiciary committee, which is chaired by senator Luke Rankin – a former Democrat. The bill – which has 24 sponsors – was referred to a subcommittee on March 15, 2023 but has not moved since then.
Tort reform supporters urged us to “note the chicanery of the judiciary chair.”
H. 3053 was pre-filed last December and formally introduced in the S.C. House on January 10, 2023. It was referred to the judiciary committee that same day but has yet to receive a hearing.
Fiedler told me his group “prefers H. 3053 as it fully repeals joint and several,” but he said SCPC would support one of the other bills “as a first step.” S.C. senator Tom Davis – who has emerged as a key broker between the two GOP-controlled chambers in recent years – told me he wants to focus that first step on “liability premium spikes for establishments that serve alcohol.”
Specifically, Davis wants to add to the existing code (§ 15-38-15) language creating “a safe harbor and an affirmative defense from liability for persons/ entities that prove by a preponderance of the evidence that they have put in place and followed best practices in regard to the use, sales, or possession of alcohol, and then specify what those best practices are.”
“My targeted approach above is a practical alternative meant to address the most-immediate problem with something I think is politically possible to pass,” Davis told me.
THE REPORT …
ABOUT THE AUTHOR …
Will Folks is the founding editor of the news outlet you are currently reading. Prior to founding FITSNews, he served as press secretary to the governor of South Carolina. He lives in the Midlands region of the state with his wife and seven (soon to be eight) children.
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