Download This Bill in Microsoft Word format
Indicates Matter Stricken
Indicates New Matter
S. 81
STATUS INFORMATION
General Bill
Sponsors: Senators McConnell, Moore, Campsen, Ryberg, Elliott, Bryant, Alexander, Leatherman and Richardson
Document Path: l:\s-jud\bills\mcconnell\jud0039.gfm.doc
Introduced in the Senate on January 11, 2005
Currently residing in the Senate Committee on Judiciary
Summary: Tort Reform Act of 2005 Relating to General Issues
HISTORY OF LEGISLATIVE ACTIONS
Date Body Action Description with journal page number ------------------------------------------------------------------------------- 12/15/2004 Senate Prefiled 12/15/2004 Senate Referred to Committee on Judiciary 1/11/2005 Senate Introduced and read first time SJ-122 1/11/2005 Senate Referred to Committee on Judiciary SJ-122
View the latest legislative information at the LPITS web site
VERSIONS OF THIS BILL
TO ENACT THE "TORT REFORM ACT OF 2005 RELATING TO GENERAL ISSUES" BY AMENDING TITLE 15, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO CIVIL REMEDIES AND PROCEDURES, BY ADDING ARTICLE 1, CHAPTER 32, SO AS TO ESTABLISH PROCEDURES GOVERNING THE AWARD OF PUNITIVE DAMAGES; TO AMEND SECTION 15-36-10, RELATING TO FRIVOLOUS CIVIL PROCEEDINGS, SO AS TO ADOPT THE REASONABLE ATTORNEY STANDARD FOR CIVIL FILINGS BY ALL LITIGANTS; TO AMEND SECTION 34-31-20, RELATING TO POSTJUDGMENT INTEREST, SO AS TO PROVIDE THAT POSTJUDGMENT INTEREST SHALL ACCRUE AT THE PRIME RATE PLUS FOUR PERCENT; TO AMEND CHAPTER 38, TITLE 15, RELATING TO CIVIL REMEDIES AND PROCEDURES, BY ADDING 15-38-15, SO AS TO ABOLISH JOINT AND SEVERAL LIABILITY IN CERTAIN CASES AND TO ESTABLISH PROCEDURES FOR ALLOCATING FAULT AMONG DEFENDANTS; AND TO REPEAL SECTIONS 15-36-20, 15-36-30, 15-36-40, AND 15-36-50, ALL RELATING TO FRIVOLOUS CIVIL PROCEEDINGS.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. The General Assembly finds that the sections presented in this act constitute one subject as required by Article III, Section 17 of the South Carolina Constitution, in particular finding that each change and each topic relates directly to or in conjunction with other sections to the subject of tort and other civil action reform as clearly enumerated in the title.
The General Assembly further finds that a common purpose or relationship exists among the sections, representing a potential plurality but not disunity of topics, notwithstanding that reasonable minds might differ in identifying more than one topic contained in the act.
SECTION 2. Title 15 of the 1976 Code is amended by adding:
Section 15-32-100. This article may be cited as the 'Punitive Damages Act.'
Section 15-32-110. As used in this article:
(1) 'Claimant' means a party to a civil action, including a plaintiff, counterclaimant, cross-claimant, or third-party plaintiff, seeking the recovery of punitive damages.
(2) 'Compensatory damages' means pecuniary damages arising from such things as medical expenses and medical care, rehabilitation services, custodial care, loss of earnings and earning capacity, loss of income, burial costs, loss of use of property, costs of repair or replacement of property, costs of obtaining substitute domestic services, loss of employment, loss of business or employment opportunities, and other monetary losses, and nonpecuniary damages arising from pain, suffering, inconvenience, physical impairment, disfigurement, mental anguish, emotional distress, loss of society and companionship, loss of consortium, injury to reputation, humiliation, other nonpecuniary damages, and any other theory of damages including, but not limited to, fear of loss, illness, or injury.
(3) 'Defendant' means a party to a civil action, including a counter defendant, cross-defendant, or third-party defendant, from whom a claimant seeks recovery of punitive damages.
(4) 'Punitive damages' means damages, other than compensatory damages, which are awarded pursuant to the provisions in Section 15-32-120. For purposes of this article, 'punitive damages' does not include treble damages, penalties, or statutory damages awarded pursuant to a statutory cause of action.
Section 15-32-120. Subject to the provisions of this article, punitive damages may be awarded in a civil action to punish a defendant or to deter repetition of similar acts.
Section 15-32-130. (A) This article applies to every claim for punitive damages regardless of whether the claim for relief is based upon a common law right of action or based in equity. In an action subject to this article, in whole or in part, the provisions of this article prevail over another provision of law to the contrary.
(B) The provisions of this article do not apply to actions brought under the South Carolina Tort Claims Act, as set forth in Chapter 78 of Title 15.
Section 15-32-140. (A) A civil action tried before a jury and seeking punitive damages must be conducted in a bifurcated trial. Each phase of the trial must be conducted before the same jury.
(B) In the first phase of the trial, the jury shall:
(1) determine and assign liability among the parties;
(2) award compensatory damages against the liable parties; and
(3) determine whether the claimant has shown by clear and convincing evidence that the conduct of the liable parties was wilful, wanton, reckless, or malicious.
(C) If a jury has made a determination that the conduct of the liable parties was wilful, wanton, reckless, or malicious, a second phase of the trial must be held in which the jury determines the amount of punitive damages to be awarded. In determining the amount of punitive damages, the jury shall consider:
(1) the degree of culpability of the liable parties;
(2) the duration of the conduct;
(3) the awareness or concealment of the conduct by the liable parties;
(4) the existence of similar past conduct within South Carolina;
(5) the likelihood that an award will deter these or other parties from similar conduct;
(6) whether the award is reasonably related to the harm likely to result from the conduct;
(7) the defendant's ability to pay; and
(8) any other factor the court considers necessary for the jury to make an adequate and informed determination.
Section 15-32-150. The court shall conduct a post trial review to ensure that an award of punitive damages is not grossly disproportionate to the severity of the offense or conduct of the liable parties. Upon conclusion of this review, the trial court shall state in a written opinion its reasons for upholding, overturning, or reducing the award. The trial court shall specifically address the evidence, or lack of evidence, as it relates to liability or the amount of punitive damages pursuant to the provisions of this article.
Section 15-32-160. A demand for punitive damages must be pled, except for the amount, in the complaint."
SECTION 3. Section 15-36-10 of the 1976 Code is amended to read:
"Section 15-36-10. (A)(1) Any person who takes part in the procurement, initiation, continuation, or defense of any civil proceeding is subject to being assessed for payment of all or a portion of the attorney's fees and court costs of the other party if:
(1) he does so primarily for a purpose other than that of securing the proper discovery, joinder of parties, or adjudication of the claim upon which the proceedings are based; and
(2) the proceedings have terminated in favor of the person seeking an assessment of the fees and costs.
As used in this chapter, `person' is defined to mean any individual, corporation, company, association, firm, partnership, society, joint stock company, and any other entity, including any governmental entity or unincorporated association of persons. A pleading filed in a civil or administrative action on behalf of a party who is represented by an attorney must be signed by at least one attorney of record who is an active member of the South Carolina Bar or who is admitted to practice in the courts of this State and must include the address and telephone number of the attorney signing the document.
(2) A document filed in a civil or administrative action by a party who is not represented by an attorney must be signed by the party and must include the address and telephone number of the party.
(3) The signature of an attorney or a pro se litigant constitutes a certificate to the court that:
(a) the person has read the document;
(b) a reasonable attorney in the same circumstances would believe that under the facts his claim or defense may be warranted under the existing law or, if his claim or defense is not warranted under the existing law, a good faith argument exists for the extension, modification, or reversal of existing law;
(c) a reasonable attorney in the same circumstances would believe that his procurement, initiation, continuation, or defense of a civil cause is not intended to harass or injure the other party; and
(d) a reasonable attorney in the same circumstances would believe his claim or defense is not frivolous, interposed for delay, or brought for any purpose other than securing proper discovery, joinder of parties, or adjudication of the claim or defense upon which the proceedings are based.
(4) An attorney or pro se litigant participating in a civil or administrative action or defense may be sanctioned for:
(a) filing a frivolous pleading, motion, or document if:
(i) the person has not read the frivolous pleading, motion, or document;
(ii) a reasonable attorney in the same circumstances would believe that under the facts, his claim or defense was clearly not warranted under existing law and that a good faith or reasonable argument did not exist for the extension, modification, or reversal of existing law;
(iii) a reasonable attorney presented with the same circumstances would believe that the procurement, initiation, continuation, or defense of a civil cause was intended merely to harass or injure the other party; or
(iv) a reasonable attorney presented with the same circumstances would believe the pleading, motion, or document is frivolous, interposed for merely delay, or merely brought for any purpose other than securing proper discovery, joinder of parties, or adjudication of the claim or defense upon which the proceedings are based;
(b) making frivolous arguments a reasonable attorney would believe were not reasonably supported by the facts; or
(c) making frivolous arguments that a reasonable attorney would believe were not warranted under the existing law or if there is no good faith argument that exists for the extension, modification, or reversal of existing law.
(B)(1) If a document is not signed or does not otherwise comply with this section, it must be stricken unless it is signed promptly or amended to comply with this section after the omission is called to the attention of the attorney or the party.
(2) If a document is signed in violation of this section, or an attorney or pro se litigant has violated subsection (A)(4), the court, upon its own motion or motion of a party, may impose upon the person in violation any sanction which the court considers just, equitable, and proper under the circumstances.
(C)(1) At the conclusion of a trial and after a verdict for or a verdict against damages has been rendered or a case has been dismissed by a directed verdict, summary judgment, or judgment notwithstanding the verdict, upon motion of the prevailing party, the court shall proceed to determine if the claim or defense was frivolous. An attorney, party, or pro se litigant shall be sanctioned for a frivolous claim or defense if the court finds the attorney, party, or pro se litigant failed to comply with one of the following conditions:
(a) a reasonable attorney in the same circumstances would believe that under the facts, his claim or defense was clearly not warranted under existing law and that a good faith or reasonable argument did not exist for the extension, modification, or reversal of existing law;
(b) a reasonable attorney in the same circumstances would believe that his procurement, initiation, continuation, or defense of the civil suit was intended merely to harass or injure the other party; or
(c) a reasonable attorney in the same circumstances would believe that the case or defense was frivolous as not reasonably founded in fact or was interposed merely for delay, or was merely brought for a purpose other than securing proper discovery, joinder of proposed parties, or adjudication of the claim or defense upon which the proceedings are based.
(2) Unless the court finds by a preponderance of the evidence that an attorney, party, or pro se litigant engaged in advancing a frivolous claim or defense, the attorney, party, or pro se litigant shall not be sanctioned.
(D) A person is entitled to notice and an opportunity to respond before the imposition of sanctions pursuant to the provisions of this section. A court or party proposing a sanction pursuant to this section shall notify the court and all parties of the conduct constituting a violation of the provisions of this section and explain the basis for the potential sanction imposed. Upon notification, the attorney, party, or pro se litigant who allegedly violated subsection (A)(4) has thirty days to respond to the allegations as that person considers appropriate, including, but not limited to, by filing a motion to withdraw the pleading, motion, document, or argument or by offering an explanation of mitigation.
(E) In determining if an attorney, party, or a pro se litigant has violated the provisions of this section, the court shall take into account:
(1) the number of parties;
(2) the complexity of the claims and defenses;
(3) the length of time available to the attorney, party, or pro se litigant to investigate and conduct discovery for alleged violations of the provisions of subsection (A)(4);
(4) information disclosed or undisclosed to the attorney, party, or pro se litigant through discovery and adequate investigation;
(5) previous violations of the provisions of this section;
(6) the response, if any, of the attorney, party, or pro se litigant to the allegation that he violated the provisions of this section; and
(7) other factors the court considers just, equitable, or appropriate under the circumstances.
(F) In determining whether sanctions are appropriate or the severity of a sanction, the court shall consider previous violations of the provisions of this section.
(G) Sanctions may include:
(1) an order for the party represented by an attorney or pro se litigant to pay the reasonable costs and attorney's fees of the prevailing party under a motion pursuant to this section. Costs shall include, but not be limited to, the following: the time required of the prevailing party by the frivolous proceeding; and travel expenses, mileage, parking, costs of reports, and any additional reasonable consequential expenses of the prevailing party resulting from the frivolous proceeding;
(2) an order for the attorney to pay a reasonable fine to the court; or
(3) a directive of a nonmonetary nature, including injunctive relief, designed to deter a future frivolous action or an action in bad faith.
(H) This act shall not alter the South Carolina Rules of Civil Procedure or the South Carolina Appellate Court Rules.
(I) The provisions of this section apply in addition to all other remedies available at law or in equity.
(J) The amount requested for damages in a pleading may not be considered in a determination of a violation of the provisions of this section."
SECTION 4. Section 34-31-20 of the 1976 Code is amended to read:
"Section 34-31-20. (A) In all cases of accounts stated and in all cases wherein any sum or sums of money shall be ascertained and, being due, shall draw interest according to law, the legal interest shall be at the rate of eight and three-fourths percent per annum.
(B) All A money decrees decree and judgments or judgment of courts a court enrolled or entered shall must draw interest according to law. The legal rate of interest is at the rate of twelve percent a year equal to the prime rate as listed in the first edition of the Wall Street Journal published for each calendar year for which the damages are awarded, plus four percent, compounded annually. The South Carolina Supreme Court shall issue an order by January 15 of each year confirming the annual prime rate. This section applies to all judgments entered on or after July 1, 2005. For judgments entered between July 1, 2005, and January 14, 2006, the legal rate of interest shall be the first prime rate as published in the first edition of the Wall Street Journal after January 1, 2005, plus four percent."
SECTION 5. Chapter 38, Title 15 of the 1976 Code is amended by adding:
"Section 15-38-15. (A) In an action to recover damages resulting from personal injury, wrongful death, or damage to property or to recover damages for economic loss resulting from tortious conduct, if the damages are determined to be proximately caused by more than one defendant, joint and several liability does not apply to any defendant whose conduct is determined to be less than twenty percent of the total fault for the damages as compared with the fault of all the defendants. A defendant whose conduct is determined to be less than twenty percent of total fault shall only be liable for that percentage of the total damages awarded against all defendants. Apportionment of percentages of fault among defendants is to be determined as specified in subsection (C).
(B) The proportionate share of damages for which each defendant is liable is calculated by multiplying the damages by a fraction in which the numerator is the defendant's percentage of liability determined pursuant to subsection (C), and the denominator is the total of the percentages of liability determined pursuant to subsection (C), to be attributable to all defendants whose actions are a proximate cause of the injury, death, damage to property, or economic loss from tortious conduct. A percentage of liability attributable to the claimant may not be included in the denominator of the fraction.
(C) The jury, or the court if there is no jury, shall:
(1) specify the amount of damages;
(2) determine recoverable damages under applicable rules concerning 'comparative negligence'; and
(3) upon a motion by at least one defendant, where there is a verdict under items (1) and (2) above for damages against two or more defendants for the same injury, death, or damage to property, specify in a separate verdict under the procedures described at subitem (b) below the percentage of liability that proximately caused the injury, death, damage to property, or economic loss from tortious conduct in relation to one hundred percent, that is attributable to each defendant whose actions are a proximate cause of the injury, death, or damage to property.
(a) For this purpose, the court may determine that two or more persons are to be treated as a single party. Such treatment must be used where two or more defendants acted in concert or where, by reason of agency, employment, or other legal relationship, a defendant is vicariously responsible for the conduct of another defendant.
(b) After the initial verdict awarding damages is entered and before the special verdict on percentages of liability is rendered, the parties shall be allowed oral argument, with the length of such argument subject to the discretion of the trial judge, on the apportionment of percentages of liability. However, no additional evidence shall be allowed.
(D) In the event that the jury cannot reach a unanimous verdict on the apportionment of fault, and the court determines that that the jury has made all reasonable efforts to do so, the court will instruct the jury to deliver a verdict approved by a majority vote.
(E) Notwithstanding the application of this section, setoff from any settlement received from any potential tortfeasor prior to the verdict shall be applied in proportion to each defendant's percentage of liability as determined pursuant to subsection (C).
(F) This section does not apply to a defendant whose conduct is determined to be intentional."
SECTION 6. (A) An insurer licensed to transact business in this State must report to the South Carolina Department of Insurance all savings directly related to a decrease in litigation and claims paid pursuant to litigation after the effective date of this act.
(B) The Department of Insurance shall review data reported on annual statements by liability insurers, including, but not limited to, paid claims, reserves, loss adjustment expenses, and such additional data as the department may require by promulgation of its Bulletins, to determine the amount of savings, if any, related to a decrease in litigation and decrease, if any, in claims paid pursuant to litigation after the effective date of this act. The department may require special reports from insurers to determine if savings are realized as a result of the provisions of this act. The department shall compile a report of savings realized as a result of the provisions of this act and submit it for General Assembly review upon request. Costs or expenses associated with the compilation of this report on savings shall be paid by the insurers pursuant to the provisions of Chapter 13 of Title 38.
The Department of Insurance shall review premium and losses by line of insurance to determine if appropriate adjustments have been made based upon department estimates of savings realized pursuant to the provisions of this act.
SECTION 7. Sections 15-36-20, 15-36-30, 15-36-40, and 15-36-50 of the 1976 Code are repealed.
SECTION 8. The provisions of this act do not affect any right, privilege, or provision of the South Carolina Tort Claims Act as contained in Chapter 78, Title 15 of the 1976 Code of South Carolina or the South Carolina Solicitation of Charitable Funds Act as contained in Chapter 56 of Title 33. This act does not authorize the recovery of punitive damages against the government.
SECTION 9. The repeal or amendment by this act of any law, whether temporary or permanent or civil or criminal, does not affect pending actions, rights, duties, or liabilities founded thereon, or alter, discharge, release or extinguish any penalty, forfeiture, or liability incurred under the repealed or amended law, unless the repealed or amended provision shall so expressly provide. After the effective date of this act, all laws repealed or amended by this act must be taken and treated as remaining in full force and effect for the purpose of sustaining any pending or vested right, civil action, special proceeding, criminal prosecution, or appeal existing as of the effective date of this act, and for the enforcement of rights, duties, penalties, forfeitures, and liabilities as they stood under the repealed or amended laws.
SECTION 10. If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding shall not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this act, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.
SECTION 11. Upon approval by the Governor, this act takes effect July 1, 2005.
This web page was last updated on Friday, December 4, 2009 at 3:26 P.M.