Comprehensive Tort Reform Legislation Introduced in SC Senate

January 29, 2009

Senator Martin Introduces Bill to Protect and Increase Business Investment and Job Creation

COLUMBIA, SC – January 29, 2009 – The South Carolina Civil Justice Coalition (SCCJC) announced that comprehensive tort reform legislation was introduced today by Senator Larry Martin (R-Pickens) and 12 co-sponsors including Senate Majority Leader Harvey Peeler (R-Cherokee).  Senate Bill 350 builds upon legislation that was successfully implemented in 2005 and addresses major civil justice issues, which will prepare South Carolina to weather today’s uncertain economy and compete in the expanding, global marketplace. 

“In order to gain ground against our regional, economic development competitors, especially states like North Carolina and Georgia, that consistently strengthen their litigation environments, we need immediate reform, “ said SCCJC Chairman Lee Bussell. “And we are proud that our state leaders are taking action with Bill 350,” he added further.

The legislation includes, placing reasonable limits on punitive and non-economic damages , class action reform, bringing accountability to the state government’s hiring of trial lawyers to sue industry, limiting the amount of bond that a business has to post when appealing an extremely large verdict, closing loopholes in the Statute of Repose that trial lawyers are exploiting, allowing the introduction of the non-use of seat belts in civil cases, reinstating the longstanding economic loss rule. 

“This legislation will help SC create a predictable and stable litigation environment which promotes a more favorable business climate,” said Cam Crawford, SCCJC Executive Director.  “Improving our business climate will lead to increased business investment and job creation,” he continued.  

Some highlights of Senate Bill 350 are the following:

Admissibility in Civil Actions of Nonuse of Seat Belt Act

–          Allows the non-use of seat belts to be admissible in civil cases to reduce damages if injury was caused by failure to wear a seat belt. 

Appeal Bond Waiver Act

–          Limits an appellant surety bond to $25 Million

–          Limits an appellant surety bond to $1 Million for small businesses 

Class Actions Improvements Act

–          Models Federal Court Rule 23

–          Immediate appellate review of certification of classes  

Full and Fair Noneconomic Damages Act

–          Provides for a reasonable limit of $350,000 award per entity, allowing for total of $1.05M to be awarded.   

Private Attorney Retention Sunshine Act

–          Provides for accountability and standards for the hiring of outside legal counsel by the State of South Carolina.  

Punitive Damages Standards Act

–          Limits awards to 3 times compensatory damages or $250,000 whichever is greater

–          Limits awards to 3 times compensatory damages or $250,000 whichever is less for small businesses 

Regulatory Compliance Congruity With Liability Act

–          Under the act, if a product or service is in compliance with regulatory standards or approved by a government agency, the manufacturer is not subject to claims provided the product or service was in line with pertinent government regulations. 

Economic Loss Rule

–          The South Carolina Supreme Court recently reversed longstanding jurisprudence in Colleton Prep Academy v. Hoover Universal by adding a broad exception to the economic loss rule by creating a legal duty in tort for manufacturers even when a product does not cause any bodily harm. The bill seeks to re-instate the longstanding economic loss rule that was the legal standard prior to the Colleton Prep Academy v. Hoover Universal decision. 

Statute of Repose

–          The bill has a clarifying clause to be added to Section 15-3-670 stating that a possible building code violation is not deemed gross negligence or recklessness per se. This clarification should stop plaintiffs’ attorneys from citing building code violations to circumvent the limitations of the Statute of Repose. 

Piercing the Corporate Veil

–          The bill provides that no claim or discovery may seek to pierce (lift) the corporate veil until the plaintiff has obtained a judgment against a company. 

Consumer Protection Act 

–          Amends the Consumer Protection Act to include a compliance exemption relating to the Federal Trade Commission, limiting damages to out-of-pocket losses, and clarification of the causation and proof requirements in recovering damages. 

“Our broad business coalition will work with the legislature this year to support these initiatives so that we can create a more predictable and stable business climate in SC that will protect our jobs and enhance our competitiveness,” said Crawford.