Some Success in South Carolina, Much More to Do

Guest post written by Earl Hunter, Executive Director of the South Carolina Civil Justice Coalition.

Frivolous lawsuits victimize South Carolina’s citizens and businesses. Our legislature has an opportunity to take further steps to end this problem during the final year of our two-year legislative session, which will end in June 2016.

One important reform, H.3266, the Trespasser Responsibility Act, was passed by the General Assembly on June 3 and signed into law by Governor Nikki Haley on June 8.  This places into statute the long-held common law that protects a landowner from liability when someone trespasses on their property and is injured. In other words, if someone is trespassing and cuts his leg on a barbed-wire fence, the trespasser is liable, not the landowner. This prevents the courts from adopting a new, ill-contrived standard that would have held landowners liable for a trespasser’s injuries, except in the case of a “flagrant” trespasser.

S.281, the Court Transparency bill, is a bill we had introduced which seeks to accomplish more of these much-needed reforms. One high-priority tort reform in this bill is “Transparency in Private Attorney Contracting” or “TiPAC”. Increasingly across the country, government officials are hiring outside attorneys on a contingency fee basis to conduct litigation on behalf of the state. Our state should set clear guidelines to ensure there are no abuses of the system or conflicts of interest. Currently, private attorneys can be hired without any legislative oversight, at whatever rate is deemed appropriate. In other states, reports of wide-spread abuse of such unchecked systems have become the norm. Creating a system with clear limits and “checks and balances” just makes common sense. North Carolina just passed this legislation last summer, joining 14 other states passing similar legislation since 2010.

Another area S.281 addresses is court transparency in asbestos litigation. One needs to look no further than U.S. Bankruptcy Judge George Hodges’ Garlock Sealing Technologies decision in a Charlotte, N.C. federal court last year, which documents how plaintiffs’ lawyers abuse the lack of disclosure between the asbestos bankruptcy trust and civil tort systems, allowing them and their clients to “double-dip”.  Judge Hodges found the withholding of exposure evidence during discovery by plaintiffs’ counsel to be “widespread and significant.” This results in plaintiffs getting compensation for claims of “100 percent” of their exposure from a financially solvent company, who may have had little or nothing to do with a plaintiff’s exposure. But shortly after receiving their claim payment, these same plaintiffs file multiple bankruptcy trust claims for exposure to many other products in order to receive additional compensation. And the plaintiff’s attorney gets his contingency fee each time, often as high as 40 percent! A number of companies have been targeted, like Garlock, forcing them to pay out individual claims and then, ultimately, to declare bankruptcy and pay into a trust. Among other things, our bill would mandate disclosure via signed affidavit for any and all current and future exposure claims.

The bottom line is that South Carolina cannot afford to wait to pass these critical tort reform measures. Allowing lawsuit abuse of any kind to exist in our state means increased costs and unpredictable liability for businesses. For the good of the Palmetto State’s citizens, we hope you will stand with us to make tort reform a priority and encourage your legislators to help us pass this common sense legislation.