South Carolina Eyes Lawsuit Limits to Help Economy

South Carolina’s economic recovery could be helped by new limits on lawsuits, claims a business group as state lawmakers consider legislation to do just that.

The Senate Judiciary committee is weighing legislation that would broaden 2005 limits placed on medical malpractice claims to other litigation. It would set a $1 million cap on pain and suffering awards and require that punitive awards against larger employers could be no more than three times the actual amount of damages or $250,000, whichever is more.

The committee was scheduled to hold a hearing on the legislation this week but postponed that session.

The South Carolina Civil Justice Coalition, which is backed by businesses including the state’s Chamber of Commerce, is pushing the legislation.

The organization said it was encouraged by Gov. Mark Sanford’s recognition of the positive impacts that tort and workers’ compensation reforms have had on improving the business climate.

“We agree that comprehensive civil justice reform is a critical issue,” said Lee Bussell, chairman of the coalition.

The group says tort reform could keep some companies from going out of business.

“The reality is, in tough economic times, every South Carolina small business is just one lawsuit away from going out of business since our legislature has not enacted reasonable limits on damage awards,” said Cam Crawford, the group’s executive director. “Frivolous lawsuits cost our state jobs. It cost more to defend a frivolous lawsuit than to pay the average worker’s wages for a year.”

In March 2008, the U.S. Chamber of Commerce released its annual lawsuit climate report that ranked South Carolina near the bottom.