South Carolina Damages Bill Expected to Become Law

By Jim Davenport | June 6, 2011

Punitive damage payouts for lawsuits will be limited for the first time in South Carolina under a bill the Legislature agreed last Thursday to send to Gov. Nikki Haley.

The House voted 99-16 to approve capping punitive damage awards in the typical case at $500,000, or three times the actual damages, whichever is greater.

A court could lift that cap if the defendant’s conduct could bring a felony conviction or was motivated by unreasonable financial gain. In those cases, punitive awards are limited to $2 million, or four times the actual damages that include things like lost wages and hospital bills, if that amount is larger.

There would be no cap at all if the defendant intended to cause harm, was guilty of a felony tied to the incident or was under the influence of drugs or alcohol.

The caps are similar to those on the books in Florida.

The final vote drew praise from business groups, including the South Carolina Civil Justice Coalition.

Coalition director Cam Crawford said “it will do a lot to enhance our economic development. I think it puts us in the playing field with a lot of states in the Southeast, so it’s a good day.”

But the measure wasn’t needed, said state Sen. Gerald Malloy, D-Darlington. “I believe it was more an imposition of political will and just based on what other states have done,” Malloy said. “I don’t think it answers questions about this on economic development as it was portrayed.”

The House had initially approved a lower cap: $350,000 or triple actual damages. And its version of the legislation also allowed juries to hear whether accident victims were wearing seat belts in car wrecks.

The Senate dropped the seat belt provision and raised the caps after business groups and lawyers spent hours working out a compromise as a Thursday deadline loomed for the Legislature to adjourn.

Haley, in a letter Tuesday, urged senators to approve the House’s version of the bill with its lower caps. But on Wednesday, Haley thanked senators for getting the bill approved.

Now, she’s expected to sign it by next week.

“It’s been a key issue for her and it’s a reasonable compromise. I would expect that she would let it become law,” Crawford said.

Haley spokesman Rob Godfrey did not immediately respond to questions about the bill.

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