Bad for business: South Carolina must reform its unfair civil liability system

Bad for business: South Carolina must reform its unfair civil liability system

South Carolina is at risk of seeing fewer jobs and less economic growth if the S.C. General Assembly fails to address and reform the state’s civil liability system, which forces businesses to unfairly pay legal claims for damages they did not cause. 

The findings come from our new report, which calls for urgent reform. 

Currently, South Carolina businesses can be forced to pay entire legal verdicts even if they were only partially at fault for an incident, a concept known as “joint and several” liability. Small- and medium-sized companies are at particular risk under this law, and there is concern it will deter them from locating or doing business in our state.

Key takeaways

  • In South Carolina, a defendant in a civil case who is partially at fault for an injury can be forced to pay 100% of a court’s verdict. Select businesses are often targeted because of this law, many of whom face disproportionate and unfair damage awards.

  • Rising insurance rates and a poor legal climate will harm South Carolina’s ability to compete for jobs in the future, putting recent economic progress in jeopardy.

  • Small- and medium-sized businesses are at particular risk in our state, as many cannot afford or are unwilling to bear the legal costs necessary to operate in a precarious legal environment.

  • A pair of House and Senate bills (H.3933 & S.533) would address problems with the current law and help reduce the number of businesses forced to pay unfair damage awards in civil cases, but would not entirely fix the underlying problem. Another bill (H.3053) would completely repeal joint and several liability and hold each party liable based on their percentage of fault, while allowing allocation of fault to nonparties.

With other nearby states making efforts to balance their respective legal environments, South Carolina must swiftly reform its civil liability law or risk being left behind. 

Read the full report HERE