The latest battle between the citizenry and the South Carolina General Assembly is being fought over tort reform. So, what is a “tort” and why is there a need to reform it?
By Katrina Shealy
tort: A harmful wrong (other than a breach of contract) for which courts will provide a remedy, usually damages, to a private party. Torts include injuries to persons, such as injuries caused by negligent automobile accidents, medical malpractice, or product defects; injuries to property, such as nuisances and trespasses; and injuries to reputation. Courts allow recovery when a defendant breaches a legal duty to a plaintiff and this breach proximately causes an injury recognized under the law. [Oxford Companion to the US Supreme Court]
In other words, lawsuits, some worthy of litigation, some not. We’ve all heard or read about some abstract suit against a company for a real or perceived injury and the amounts of punitive (punishment) and compensatory (money awarded to replace something lost) are sometimes outrageous.
Remember the old woman that sued McDonald’s over a hot cup of coffee? She put the cup between her knees and it eventually spilled in her lap. She sued McDonald’s for negligence because she claimed the coffee was too hot to be safe. The jury found that McDonald’s was eighty percent responsible for the incident and they awarded her $160,000 in compensatory damages and $2.7 million in punitive damages. The decision was appealed and the two parties ultimately ended up settling out of court for a sum less than $600,000.
Granted, that’s on the far end of the scale of dumb lawsuits and there are many that are far more justly adjudicated. However, there is no guidance or standard for juries hearing these cases. Sometimes a judge will throw a case out for … well, for being stupid, or the court will pare the amount sought to some arbitrary sum that (s)he believes to be more reasonable. Often, the jury itself will decide that the plaintiff is asking too much or too little and will decide for itself the appropriate punitive and compensatory sums.
How those judgments are reached will vary, as is always the case in trials, but the difference is that a lawsuit affects more than the involved parties and the precedences set ripple through the community and the nation.
The website Stuffed Suits have published “25 Reasons Why We Need Tort Reform” a thoughtful and compelling list of the consequences of the current state of tort legislation. Among them:
Small businesses bore 81% of business tort liability costs but took in only 22% of revenue
Small businesses paid $35.6 billion of their tort costs out of pocket.
Medical malpractice costs for doctors in small groups and small medical labs total $28 billion.
Only 46% of the total litigation costs go to the plaintiff in economic and non-economic damages.
1 in 4 dollars spent on healthcare in the U.S. pays for unnecessary tests and treatments that doctors order to keep from being sued.
A 2007 Harris poll of business owners or managers found that:
61% said decisions to avoid lawsuits made their products and services more expensive.
45% said it made a product or service unavailable to customers.
23% said the decisions forced them to cut employee benefits.
South Carolina’s legislative blog, The Process Story, has posted a series on the need for tort reform in the Palmetto State, including this:
The U.S. Chamber of Commerce has an online resource on state lawsuit climates through its Institute for Legal Reform. According to the Chamber, South Carolina ranked 37th in business-friendly lawsuit climate in 2007, 43rd in 2008 and 39th last year. It’s clear that we as a state still have a ways to go, which is why passing tort reform is so important.
Clearly, without changing the laws on lawsuits, the economic gyroscope of the state will remain seriously out of balance.
Responding to this dire need are several prominent members of the General Assembly, key among them Speaker of the House Bobby Harrell (R-Charleston). Speaker Harrell introduced and marshaled through H.3375 in January 2011, a bill to enact the “South Carolina Fairness in Civil Justice Act of 2011 relating to punitive damages, so as to provide limits on the award of punitive damages and to provide for certain procedures and requirements relating to the award of these damages.”
Under H.3375, punitive damages would be limited to three times compensatory damages or $350,000 whichever is greater. The bill passed the House on February 9, 2011 with a vote of 100 to 7.
However, as is so often the case, legislation in South Carolina gets obstructed by the upper house, the Senate. So, too the case with tort reform. A handful of powerful State Senators are blocking two companion bills to H.3375 in the Senate; S.22 and S.23.
Governor Nikki Haley, along with the South Carolina business community, is pushing the Senate to enact one of these critical bills. In a letter to the State Senate, Governor Haley said, in part:
Tort reform is very important in recruiting companies to South Carolina and protecting our existing businesses from frivolous lawsuits.
As governor and business leaders, we ask that you pass a meaningful tort reform bill including a reasonable limit on punitive damages. Virginia, North Carolina, Georgia and Florida each have a cap on punitive damages.
To be competitive, South Carolina must adopt legal standards similar to our neighboring states.
We support House Bill 3375 as passed by the House of Representatives on February 9, 2011 by a vote of 100 to 7. In addition, the business community supports Senate Bill 22 and Senate Bill 23 as introduced.
Also, we strongly oppose the Senate Judiciary Committee amendment to H. 3375, which has been rated “business negative” by several South Carolina business organizations.
Why are these Senators holding up this legislation?
Whether a lawsuit is frivolous or reasonable and whether it’s won or lost, somebody always wins. Those “somebodies” are the trial lawyers. Understandably, any effort to “reform” tort law is going to be opposed by those who benefit the most by leaving those laws as they are.
In the case of changing legislation relative to litigation, the trial lawyers have a huge financial stake in the outcome. Simply put, limits on liabilities are also limits on their fees. So, lawyers and law firms are pouring money to certain political leaders to quash the future of tort reform.
According to sources within the Senate, the members most responsible for choking off this legislation include:
John M. “Jake” Knotts, Jr. [R] District 23 – Lexington County
John E. Courson [R] District 20 – Lexington & Richland Counties
Luke A. Rankin [R] District 33 – Horry County
and David L. Thomas [R] District 8 – Greenville County
I understand that legislative procedures and protocols can sometimes be complex and delicate, but, between us, I don’t understand how a few Senators among the many can so effectively stall such important work. So, rather than encouraging voters to call those Senators listed above, call all of them. You can find them listed by district here, or by name here.
Without demands from the citizenry, legislators will do the bidding of those from whom they hear the most; lobbyists and special interests.
What’s of greater value – the vote or the dollar?
Katrina Shealy is an insurance underwriter and 2012 candidate for South Carolina Senate District 23 (Lexington County).