The insurance companies pushing tort reform in South Carolina have set up a false conflict among South Carolinians. If you listen to their stories, it’s greedy injury victims v. business owners and homeowners whose insurance premiums are too high. Of course, it’s not greedy to want fair compensation after a serious injury that triggers high medical bills, loss of income, and sometimes permanent life changes. But that’s not the only lie insurance companies are telling you about tort reform.
Concerned community members who testified before the South Carolina Senate yesterday shone a light on two concerns you probably haven’t heard anything about.
Business Owners, Professionals and Homeowners Could Be Hurt by Tort Reform
SB 244 would allow juries to assign fault to people or entities that weren’t parties to the lawsuit. Since those entities aren’t involved in the suit, they won’t be responsible for paying the percentage of damages assigned to them. But the amount the defendant pays will be reduced.
That’s great for insurance companies because it means if they can find anyone else to point the finger at–someone who won’t be in court to defend themselves–the insurance company pays out less. They want you to believe it will be good for businesses and homeowners, too, because it will lower their insurance premiums. History tells us that’s not true.
Fault Could Be Assigned to Non-Parties Without Notice
During yesterday’s Senate hearing, one South Carolina business owner spoke out about what this change would really mean for people like her and her physician husband.
If SB 244 passes, her business (or yours) could be named as a responsible party in a lawsuit without any notice to you. A jury could assign blame to your business without you even knowing about it.
Since you weren’t a party to the lawsuit, you wouldn’t have to pay damages. But how else might that public record affect your business or your medical practice? Would it harm your reputation with prospective partners and customers? Would insurance companies turn around and use that data as an excuse to raise your premiums? How would that jury finding–entered with no opportunity to tell your side of the story–impact other related litigation?
SB 244 Could Leave Homeowners and Commercial Property Owners Holding the Bag
Another concerned citizen raised the issue of how proposed changes would let builders off the hook for violating building codes–the minimum standard for construction projects. That would leave homeowners and taxpayers on the hook for millions of dollars in costs of cleaning up after them.
There is an 8-year statute of repose on claims relating to faulty construction. That’s a hard cut-off on filing a lawsuit, even if the property owner didn’t know about the problem. But there are exceptions. That time limit doesn’t apply if the contractor engaged in fraud, gross negligence, or recklessness. Under the existing law, building code violations can be used as evidence of fraud, gross negligence or recklessness.
SB 244 would change that, and would add the provision that “A violation is considered material only if it exists within a completed building, structure or facility which has resulted in physical harm to a person or significant damage to the performance of a building or its systems.”
That’s a bit technical, but the upshot of the concern raised is that with these new restrictions on exceptions to the 8-year statute of repose, homeowners and other building owners could learn of serious issues with their structures 9 or 10 or 15 years after construction–while most homeowners are still making mortgage payments–and have no recourse. That could leave homeowners unable to either repair or sell their property.
Again, the insurance carrier saves money, while South Carolina citizens and local businesses suffer.
Tell your legislators you don’t want to enrich insurance companies by hurting South Carolina homeowners, professionals, and small business owners.
Learn more or find your legislator at https://fairsc.com