|
Getting your Trinity Audio player ready...
|
by RICK TODD
***
Ages ago, piracy and catastrophes thwarted the growth of significant trade and commerce for all but the wealthiest and most powerful. Eventually new marketplaces emerged, allowing the offloading of some of that risk. Peace of mind for a piece of profit enabled entrepreneurs, risk takers, and economies to develop and thrive. The wager on a profit is the foundation of the marketplace.
Risk transfer is essentially “insurance.” Varying activities carry their own unique risk profiles and are priced accordingly. Viable, healthy markets need reasonable levels of predictability, stability, sustainability – and profit. Absent any of these, the activity eventually becomes so costly to insure that fewer will cover it, leading to affordability challenges downstream.
To satisfy the public’s demand for goods and services, “tort” courts evolved to provide a transparent and trusted way to resolve disputes when inevitable breakdowns cause injury. Early designs efficiently sorted out fault and liability, providing reasonable and fair share restitution, when available. A cottage industry of injury lawyers working on percentage-based contingency fees sprung up, incentivized to extract as much out of the system as clients and judges would allow. Fees now run between a third to upwards of 40% plus expenses, practically free of competition.
***
As with all systems left unchecked, mistakes now get monetized. Earnest effort is threatened with punishment damages. The deepest pocket gets targeted to pay for the responsibilities of others. The inability to self-regulate has stretched and twisted matters beyond the bounds of fairness and common sense, deforming the system. Eventually, periodically, most state legislatures summon the will to rein this in with reforms. But not South Carolina.
Modern-day legal pirates don’t have to sneak up to seize targets. Their profiteering exploits are pitched on most billboards and TVs, haunting our airwaves. The most feared ply state-sanctioned “judicial hellholes.” Despite having generally adequate insurance for their financial responsibilities, vulnerable defendants have no citadel in the form of clear, modernized statutes and procedures, or limits to protect them from abuse.
South Carolina does have a law that limits insurance carrier profits, beyond which they must be returned through rebates or premium reductions. What we don’t have are guardrails on greed. Vilifying the profits of “big insurance” and “big business” is propaganda used by “big law” to stigmatize their courtroom opponents in the court of public opinion. This is because insurance is the predominant currency of the injury court system.
***
RELATED | THE WAR FOR JUSTICE IN SOUTH CAROLINA
***
Roughly 32% of the South Carolina General Assembly and our current governor have legal backgrounds, while less than 2/10th of 1% of South Carolinians are practicing attorneys. This is gross imbalance. Lawyer-legislators are loathe to take on their own system. But only they can change law.
The horrors from Hampton County brought to a head the “liquor liability insurance crisis.” Alcohol sellers and their insurers suffer from a lack of legal clarity and confidence in our system. But so does every other sector. This crisis is at every door.
One is barreling headlong towards the truck transportation sector, the one connecting all others. Trucking operations in South Carolina are paying disproportionately more for increasingly less accessible and affordable catastrophic coverage. Consumers are suffering these significant contributors to the affordability crisis.
***
NEW LIVE SHOW WEDNESDAYS @ 7:00 P.M.
***
Risks and costs are the silent killers of small, locally owned mom-and-pop businesses that depend on trucks. Droves are closing their doors and turning them in. Succeeding generations are increasingly unwilling or unable to carry this burden.
Bad actors that creep into our supply chains, undercutting compliant parties can be properly dealt with through smarter and more uniform state and federal regulation, administration, enforcement, and penalties. We are supporting partners in that initiative presently. South Carolina’s legal system needs similar and immediate attention.
Truck liability insurance is now priced as if every routine collision might result in a catastrophic, nuclear payout. That gun-to-the-head threat is what drives excessive settlement demands, a perversity that is perpetuated by legislative inaction. This is not legal system efficiency. It is the recipe for fraud, corruption and social inflation.
Litigation expenses now make up 40% of claims costs, rising from 27% just a few years ago. This is the epitome of unsustainability. Insurance is essentially math. The math doesn’t lie.
***
ABOUT THE AUTHOR…
J. Richards “Rick” Todd is the president and CEO of the South Carolina Trucking Association, an “alliance of businesses that use trucks.” Their advocacy has positioned South Carolina’s motor carriers with excellent operating and tax conditions, by leading or participating in initiatives reforming and restructuring state government and improving highway infrastructure. Restoring fairness to the state’s auto-liability system is a top priority so that the state’s commercial fleets can competitively serve the state’s economic demands.
Rick is a Columbia native and began his career at SCTA in 1979 upon graduation from the University of South Carolina with a Degree in Journalism. He has been CEO since 1988. He has chaired, held leadership positions, and received numerous distinguished awards from state and national associations and organizations.
***
WANNA SOUND OFF?
Got something you’d like to say in response to one of our articles? Or an issue you’d like to address proactively? We have an open microphone policy! Submit your letter to the editor (or guest column) via email HERE. Got a tip for a story? CLICK HERE. Got a technical question or a glitch to report? CLICK HERE.
