The Crisis Facing South Carolina

The Numbers Tell the Story

South Carolina ranks 37th nationally in lawsuit climate according to the Institute of Legal Reform. Our broken tort reform system imposes a crushing burden on families and businesses:

• $3,181 per household - the annual “tort tax” every South Carolina family pays

• 2.5% of state GDP - the total cost of tort litigation to our economy

• Highest liability insurance rates in the region - forcing businesses to choose between closing or passing costs to consumers.

South Carolina’s civil justice system has become a rigged game where trial attorneys profit while small businesses suffer. The core problem is our archaic joint and several liability laws that allow defendants with minimal fault to be held responsible for massive judgements.

How the Current System Works Against Small Business

Under South Carolina’s current laws, a business can be found just 1% at fault for an incident but forced to pay 100% of the damages if other defendants can’t pay. The “lawsuit lottery” system has created a feeding frenzy for trial attorneys who specifically target businesses with deep pockets, regardless of their actual responsibility.

The Trial Attorney Gravy Train

South Carolina’s current system is essentially judicial socialism - redistributing wealth from productive businesses to trial attorneys through a rigged legal process. This isn’t about helping victims; it’s about maximizing attorney fees at any cost.

The evidence is clear: trial attorneys have spent massive amounts opposing reform, including over $1.7 million in campaign contributions to lawmakers in recent years. Their opposition isn’t about justice - it’s about protecting a lucrative system that allows them to extract maximum fees from businesses regardless of actual fault.

Why Current Law is Anti-Business and Anti-Consumer

Venue Shopping Creates "Nuclear Verdicts"

South Carolina law allows plaintiffs to file lawsuits anywhere in the state where a company does business, not just where the incident occurred. This enables forum shopping to counties known for sympathetic juries and massive verdicts.

The result? "Nuclear verdicts" have become routine, especially in certain judicial districts where eight-figure awards are now commonplace. These excessive judgments aren't based on actual damages but on the emotional manipulation of juries by skilled trial attorneys.

The "Empty Chair" Problem

Currently, juries cannot consider the fault of parties who aren't named in the lawsuit or who settled before trial. This means the most culpable parties often escape responsibility while businesses with minimal involvement bear the full burden.

Insurance Market Exodus

The predictable result of our broken system is an insurance market in crisis. Companies are fleeing South Carolina because they can't accurately assess risk in a state where legal outcomes bear no relationship to actual fault. Those that remain charge premium rates that many small businesses simply cannot afford.

The Economic Toll on South Carolina

Small Business Casualties

The human cost of our broken tort system is measured in closed businesses and lost jobs. From restaurants and bars to trucking companies and healthcare providers, South Carolina businesses are either closing their doors or passing massive insurance costs on to consumers.

Documented Business Closures

The SC Venue Crisis has cataloged numerous establishments forced to close due to liability insurance costs, including:

• Blind Horse Saloon (Greenville) - 29 years in business
• Tribble's Bar and Grille - facing closure as insurer exits the state
• Multiple restaurants, taprooms, and music venues across the state

Regional Competitiveness Crisis

While South Carolina clings to an outdated legal framework, our neighboring states have modernized their tort laws to attract business investment. Georgia, North Carolina, Florida, and Tennessee all have more business-friendly liability rules, putting South Carolina at a severe competitive disadvantage.

This isn't just about individual businesses - it's about South Carolina's economic future. Companies considering expansion or relocation factor legal climate into their decisions, and our reputation as a lawsuit-friendly state is driving investment elsewhere.

What Real Reform Looks Like

Learning from Recent Progress

In May 2025, South Carolina took a small step forward by passing H.3430, which addressed some liquor liability issues and modified joint and several liability rules for certain cases. While this was progress, it was far from the comprehensive reform needed to fix our broken system.

Essential Elements of Comprehensive Reform

Fair Fault Allocation

• Proportional liability: Defendants should only pay damages proportional to their actual fault
• Empty chair defense: Juries must consider the fault of all responsible parties, including those who settled or weren't sued
• Threshold protections: Defendants with minimal fault (under 50%) shouldn't be jointly liable for non-economic damages

Venue Reform

• Restrict venue shopping by requiring lawsuits to be filed where the incident occurred or where the defendant's principal place of business is located
• End the practice of forum shopping to plaintiff-friendly jurisdictions

Caps on Non-Economic Damages

• Establish reasonable limits on pain and suffering awards to prevent runaway jury verdicts
• Protect legitimate compensation for medical expenses and lost wages while curbing excessive awards

Proposed Legislation: The South Carolina Civil Justice Modernization Act

Comprehensive Tort Reform Package

Section 1: Joint and Several Liability Reform

Purpose: Eliminate the unfair system that allows minimally-at-fault defendants to pay excessive damages.

Key Provisions:

• Defendants found less than 50% at fault cannot be held jointly liable for non-economic damages
• Each defendant's liability limited to their percentage of fault as determined by the jury
• Exception maintained for defendants acting in concert or with specific intent to harm

Section 2: Empty Chair Defense

Purpose: Ensure juries consider all responsible parties when allocating fault.

Key Provisions:

• Mandatory inclusion of settling parties on verdict forms
• Jury consideration of fault by non-parties with adequate notice
• Clear procedures for adding responsible parties to fault allocation

Section 3: Venue Reform

Purpose: End venue shopping and ensure cases are heard in appropriate jurisdictions.

Key Provisions:

• Lawsuits must be filed in the county where the cause of action arose
• Alternative venue only where defendant's principal place of business is located
• Special provisions for multi-county incidents

Section 4: Non-Economic Damage Caps

Purpose: Provide predictability while preserving legitimate compensation.

Key Provisions:

• $500,000 cap on non-economic damages in most cases
• $1,000,000 cap for catastrophic injury or wrongful death
• No cap on economic damages (medical expenses, lost wages, etc.)
• Annual inflation adjustments to maintain real value

Section 5: Insurance Market Stability

Purpose: Restore confidence and competition in the liability insurance market.

Key Provisions:

• Require insurance companies to justify rate increases based on reformed liability standards
• Establish rate review process to ensure reforms translate to premium reductions
• Promote competition by removing barriers to entry for new insurers

Section 6: Implementation and Effective Date

Timeline:

• Act takes effect January 1, 2026
• Applies to all causes of action arising after the effective date
• Six-month transition period for insurance market adjustments
• Annual review of implementation and effectiveness

Why This Reform Package Will Work

This comprehensive approach addresses the root causes of South Carolina's tort crisis rather than applying band-aid solutions. By eliminating the unfair advantage currently enjoyed by trial attorneys, we can:

• Restore fairness: Defendants pay damages proportional to their actual fault
• Reduce insurance costs: Predictable liability leads to lower, more competitive premiums
• Attract business investment: Companies will view South Carolina as a fair place to do business
• Protect consumers: Lower business costs translate to lower prices for goods and services
• Preserve legitimate claims: Injured parties still receive full compensation for their actual damages

Time for Action

South Carolina cannot afford to delay comprehensive tort reform any longer. Every day we maintain this broken system, more businesses close, more jobs are lost, and more families pay higher prices for everything from insurance to restaurant meals.

The trial attorney lobby will fight these reforms with everything they have because their lucrative business model depends on maintaining an unfair system. They'll claim to be protecting victims while actually protecting their own profits. Don't be fooled by their rhetoric about "consumer protection" - this is about protecting a system that enriches attorneys at everyone else's expense.

South Carolina deserves a legal system that serves justice, not trial attorney bank accounts. It's time to end the lawsuit lottery and restore fairness to our civil justice system.