Agenda

Tort Reform Issues 2020

The Fair Share/Comparative Fault Bill (H.3758)

The SCCLR and our associates are pushing for the passage of legislation that will address the inequitable outcome of the South Carolina Supreme Court’s majority decisions in two separate but related rulings involving the same statute: 1) a state court case, Smith v. Tiffany (April 26, 2017), and 2) a U.S. District Court’s certified questions to the Supreme Court in Machin v. Carus Corporation (April 26, 2017).  In the decisions, the South Carolina Supreme Court ruled that a defendant in a civil injury (or damages) case involving the actions of multiple parties cannot have another more responsible party or parties joined to the case or added to a verdict form and apportioned fault by the judge or jury. A single defendant, generally the one with the highest level of liability insurance or self-insurance, and even if minimally responsible, can be forced to pay 100% of the damages to a plaintiff, even if the plaintiff’s actions were also partially responsible for their own injuries or damages, as long as the fault of the defendant was determined to be greater than the fault of the plaintiff, i.e. greater than 50%. Further, the Court’s plain language reading of the statute determined that a defendant cannot seek contribution or recovery from the most responsible party or parties if the plaintiff settled before trial with the most responsible party or parties, making them nonparties to the case, and signed an agreement (covenant) not to sue. The defendant is only entitled to a setoff of the settlement amount the plaintiff chose to accept from the most responsible nonparty or nonparties. When a most responsible party has little or no insurance, the plaintiff can essentially keep them out of a case and not allow the fault of that party to be determined by the jury or trier of fact. The case then only involves the determination of fault between the injured plaintiff and the defendant with the highest liability coverage or highest ability to pay. The Court cited the statute’s requirement that the judge or jury, “In determining the percentage attributable to each defendant, and any fault of the plaintiff must be one hundred percent”. It further states, “In calculating the percentage of fault attributable to each defendant, inclusion of any percentage of fault of the plaintiff (as determined in item (2) above) shall not reduce the amount of plaintiff’s recoverable damages (as determined under item (2) above).” The Court referenced a different ruling by the Georgia Supreme Court in a similar case because the Georgia statute requires 100% of fault be apportioned to “all parties and nonparties”, not “defendants and the plaintiff”, as written in the South Carolina statute. South Carolina is now an outlier when compared to other states. We are seeking an update to our statute to correct this unfairness in our system by changing apportionment of fault in our statute to “all parties and nonparties”. The Supreme Court majority even states that its resulting opinion may be unfair, but “the policy decision belongs to the legislature, and the legislature has crafted the provisions of the Act as it sees fit.” It goes on to state, “In honoring separation of powers, we adhere to the principle that a court must not reject the legislature’s policy determinations merely because the court may prefer what it believes is a more equitable result.” We must pass the “Fair Share” bill to protect our citizens and businesses.

Transparency in Private Attorney Contracting (S.490)

SCCLR is seeking to provide transparency and set parameters for the AG or a Solicitor who is hiring outside private attorneys to represent the state, and set reasonable limits as to how much they can be paid on behalf of the state.

The past two decades have witnessed a dramatic increase in the use of private, contingency-fee attorneys on behalf of the state by both attorneys general and governors. While bona fide rationale exists for state use of private sector legal services in specific instances, the lack of uniform policies to govern such arrangements has the potential for abuse and conflict of interest, which has been seen in a number of states.

Recognizing this, leading state attorneys general have called for reforms that recognize the discretion and independence needed to enforce state laws free from the influence of parties that may have a private interest in the outcome of litigation. Proposed reform measures have sought to preserve the ability for state attorneys general to contract with outside contingency fee counsel while insulating themselves from political pressure and ensuring maximum benefit to taxpayers. Policy proposals focus on common sense good government principles including transparency and accountability.

The purpose of the act is essentially to create transparency, reasonably limit contingency fees, and codify recent case law requirements to ensure that the State remains in control of litigation when it hires contingency fee counsel.

Under the proposed Act:

  1. The Attorney General must analyze certain factors and make a written determination that contingency fee representation will be both cost-effective and in the public interest, prior to entering into a contract.
  2. Contingency fees are subject to tiered limits and an aggregate cap of $50 million, exclusive of reasonable costs and expenses.
  3. Certain requirements must be met throughout the contract to ensure government attorneys retain complete control over the litigation.
  4. Contingency fee contracts must include certain standard provisions reflecting what is expected of the government attorneys and contingency fee counsel.
  5. The contingency fee contract, payments made under the contract, and the Attorney General’s written determination about the need for contingency fee representation are to be posted on the Attorney General’s website. Other records relating to the contract are to be subject to the state’s Freedom of Information Act. The private attorneys and paralegals are to maintain detailed contemporaneous time records for presentation to the Attorney General on request.
  6. The Attorney General must submit an annual report to the Senate President and Speaker of the House that describes the State’s retention of contingency fee counsel in the preceding calendar year.

Asbestos Trust Claims Transparency, (S.399)

Approximately 100 companies have been forced into bankruptcy due to asbestos-related liabilities, including virtually all primary historical defendants such as manufacturers of asbestos-containing thermal insulation. Trusts holding $36.8 billion (2011 GAO Report) have been established to pay for harms caused by reorganized companies’ products.

Thus, plaintiffs have two separate paths to recovery: asbestos bankruptcy trusts and tort cases. Trust claims contain important information regarding the plaintiff’s exposures to products of bankrupt companies and admissions that those products caused the plaintiff’s disease.

Plaintiffs routinely “double dip,” receiving tort lawsuit settlements/awards, then, after an award or settlement they file claims with multiple asbestos bankruptcy trusts and get paid again and again. By bringing tort claims first, plaintiffs give exposure history testimony that bolsters their tort cases against solvent companies while suppressing evidence of exposure to bankrupt companies’ products. These exposures are compensated by the various asbestos trusts.

Plaintiffs should be required to file and disclose all asbestos trust claims before trial. SCCLR legislation would require claimants, during discovery in state asbestos tort actions involving a solvent defendant, to disclose asbestos trust claims that have been submitted or could be submitted on behalf of a plaintiff to an asbestos trust entity established by a U.S. Bankruptcy Court.

The legislation does not deny victims their day in court. All rights to pursue compensation in the tort and trust systems are preserved. Plaintiffs do not face new burdens; the legislation simply changes the timing of the filing of trust claims: trust claims now routinely submitted after trial would have to be filed before trial to promote honesty and fairness in litigation. Claimants do not endure delays if timely disclosures are made.

Seatbelt Non-Use Admissibility in Civil Actions (S.120)

South Carolina recognizes that seat belts prevent needless injury and death in motor vehicle crashes. An overwhelming majority of South Carolinians – more than 90% according to 2014 federal estimates – choose to buckle up when they ride in passenger vehicles. And there is good reason for doing so: the South Carolina Department of Public Safety has recognized that “safety belts are the single most effective safety device for preventing death and injury.”

Seat belt use is not just a good idea, it’s the law in South Carolina. For almost three decades South Carolina has required every driver and every occupant of a motor vehicle to buckle up, and since 2005, South Carolina has empowered its peace officers to enforce the seat belt mandate as a primary offense. Even further, South Carolina statute provides for education programs to encourage safety belt use in communities across the state. [1] Regardless of whether they do so because of the legal requirement or because of seat belts’ life-saving ability, South Carolinians expect motorists to buckle their seat belts whenever they take to the roads.

Although buckling a seat belt costs nothing and takes just a few seconds, the failure to take this small step can generate enormous costs. According to the South Carolina Department of Public Safety, unbelted vehicle occupants die in crashes at a vastly disproportionate rate. In 2012, unbelted occupants accounted for less than 10% of South Carolina motorists but more than 50% of fatalities.   As the South Carolina Department of Public Safety has explained, “Failure to use a seat belt contributes to more fatalities than any other single traffic-related behavior.” When unbelted occupants survive collisions, they experience much worse injuries. Hospital costs for unbelted motorists typically run 2 – 5 times higher than such costs for crash victims who wore their seat belts. When motorists choose to ignore their duty to buckle up, easily preventable injuries and avoidable costs occur.

Despite South Carolina’s expectation that motorists wear their seat belts to prevent injuries in the event of a collision, South Carolina jurors asked to render verdicts in lawsuits arising from motor vehicle accidents are precluded from hearing evidence that a vehicle occupant had failed to buckle up. Current statute prohibits jurors from considering the extent to which a person’s refusal to wear a seat belt caused that occupant’s injuries, or from using their best judgment in allocating responsibility for an unbelted occupant’s injuries between the crash itself and the failure to wear a seat belt. In operation, this provision amounts to a “gag rule” preventing discussion of important evidence. Senate Majority Leader Shane Massey’s legislation, S.120, is needed to allow South Carolina’s jurors to learn the whole truth, so that they may decide based on the complete evidence what recovery an unbelted motorist should receive.

[1]See S.C. Code Ann. §56-5-6565.

 

The South Carolina Coalition for Lawsuit Reform (SCCLR) serves as the united voice for the business community on tort and workers' compensation issues; coordinating lobbying, legal, grassroots and public relations activities.