Darby, Gossett, Rawl, Todd: Tort Reform Will Preserve, Promote Jobs

All of the recent discussion about job creation makes us wonder why we are not taking an important step in solving a major competitiveness problem facing South Carolina: enacting reasonable limits on punitive damages. We are committed to long-term, meaningful civil justice reforms intended to produce a more positive business climate and a more fair and balanced judicial system.

The U.S. Chamber of Commerce ranks our state 39th out of 50 states for fairness of its litigation environment. National surveys conducted by legitimate business and industry organizations consistently report that business location decisions are substantially impacted by states’ lawsuit environments. For our opponents to suggest otherwise proves they don’t live in the real world of job creation.

Where state laws provide for punitive damages (six states prohibit them, 23 have limits), they exist to punish and deter. Economic (medical, lost wages, etc.) and non-economic (“pain and suffering”) damages are not limited in our state, and the reforms promoted do not seek to limit them. But aggressive lawyers use the threat of punitive-damage claims to inflate lawsuit settlement values, resulting in higher litigation costs for business, higher economic costs for all citizens and, of course, more money for themselves. Lawyers dream they are one case away from riches, while small businesses fear they are one lawsuit away from bankruptcy.

Our primary competitors, Virginia, North Carolina, Georgia and Florida, all have passed limits on punitive damages, and their systems are not deemed to be unfair or unjust.

Last year in our markets, TV lawyers spent a staggering $20 million on television ads alone. This doesn’t include the pervasive billboards and telephone directory ads they buy. The result: 33,000 more lawsuits than in 2006, a clogged legal system, an even more litigious culture and even higher costs of doing business in South Carolina.

Many state lawmakers agree that tort reform is an important business issue, and earlier this year, H.3375 was approved by the House with an overwhelming bipartisan vote of 100-7. Gov. Nikki Haley has extended her support for the House version of the bill by co-signing a letter to the Senate — along with 80 CEOs and business leaders representing businesses large and small across the state — urging prompt passage of a competitive tort-reform bill.

As the legislation stands now in the Senate, the trial lawyers and their agents have gutted it. Leaders of the business community firmly oppose their actions. We will stand firm as we seek to reduce frivolous lawsuits, and challenge those senators who are working against these most reasonable reforms. We applaud the bold leadership of Sens. Harvey Peeler and Larry Martin as they press their Senate colleagues to get this done right.

This legislation will cost the state nothing, but it will promote job growth, while restoring faith and integrity in our civil justice system.

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Authors of the column:
J.J. Darby
State director
National Federation of Independent Businesses

Lewis Gossett
President and CEO
S.C. Manufacturers Alliance

Otis Rawl
President and CEO
S.C. Chamber of Commerce

Rick Todd
President
S.C. Trucking Association