South Carolina Senate Reaches Deal on Lawsuit Damage Awards

By JIM DAVENPORT | June 2, 2011

South Carolina senators gave key approval Tuesday to a bill limiting lawsuit punitive damages, but bucked South Carolina Gov. Nikki Haley along the way.

Haley wanted the Senate to go along with the House and approve a cap of $350,000 or triple the actual damages, whichever was greater.

Instead, the Senate with a 39-0 vote gave second reading to a bill that sets up two tiers of lawsuit limits similar to what Florida has on its books.

In the typical case, punitive awards would be limited to $500,000 or three times the actual damages, whichever is greater.

In the worst cases, punitive awards are capped at the greater of $2 million or four times the actual damages. The higher limits would apply, for instance, when a company’s or individual’s actions causing the harm were motivated by financial gain.

Supporters and opponents weren’t optimistic about reaching a deal as Tuesday’s Senate session began. But after lunch, they huddled for hours with legislators in the Statehouse lobby. Legislators would shuttle between clutches of advocates from both sides. A five-minute recess called to work out final deal stretched into hours.

Senate President Pro Tem Glenn McConnell said the sides had no choice but to make a deal with adjournment looming Thursday and no plans to allow debate to continue on the unfinished bill in an extended session that begins June 14.

“Time was running out,” said McConnell, R-Charleston.

A final Senate vote on the bill could send the bill back to House on Wednesday. McConnell said he hopes the House approves the Senate lawsuit limits.

That would be a test for Haley. On Tuesday, she sent senators a letter saying they’d have to pass the House’s caps of $350,000 or triple damages. She said she’d note their votes on report cards she’ll issue for each legislator at the end of the session.

“Time is growing short,” Haley wrote. “We must act quickly to improve the business climate of our state by enacting strong tort reform.”

Haley spokesman Rob Godfrey didn’t immediately respond to questions about the Senate’s version of the bill.

Supporters of the limits said they could live with the compromise. Modeling it after Florida’s law is a good thing, said Cam Crawford, director of the pro-business South Carolina Civil Justice Coalition. His group has lobbied for the caps for years. “It’s a pro-business piece of legislation,” Crawford said.

Crawford said he could live with either the House’s or the Senate’s version. “Both versions will advance the interests of the state and create pro-business climate,” Crawford said.

Opponents questioned the need for any caps, including Mark Joye, president of the South Carolina Association for Justice, a trial lawyer group. “We still do not believe that there was a need to put caps on punitive damages,” Joye said.

Was this article valuable?

Here are more articles you may enjoy.