South Carolina Governor Mark Sanford recently signed the South Carolina Tort Reform Act of 2005, which makes a number of significant changes to the law and procedure in South Carolina in professional malpractice cases and all cases filed in South Carolina.

Although it seems highly technical on its face, one of the most significant aspects of the Tort Reform Act changes the law that allowed foreign and domestic companies to be sued in any county in South Carolina in which they own property or do business. Historically in South Carolina, plaintiffs often brought lawsuits in poorer counties which had no connection to the lawsuit. One such county, Hampton County, was nationally recognized for its disproportionate jury awards. As a result of these large awards, existing companies left Hampton County and new companies, such as Wal-Mart, determined not to locate in Hampton County. Under the Act, a foreign corporation may only be sued in a county (a) with the most substantial connection to the suit, (b) where the plaintiff resides, or (c) where the defendant’s principal place of business within South Carolina is located, as defined by statute. The venue provision was designed to promote economic development and employment opportunities in rural counties.

The Act also amended the South Carolina Frivolous Proceedings Sanctions Act, which allows a court to order a plaintiff to pay attorneys’ fees and costs as a sanction for prosecuting a frivolous lawsuit. The new Act allows a court to award attorneys’ fees and costs for a prevailing defendant provided the court finds that a reasonable attorney would have concluded one of the following: (1) that a 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; (2) the civil suit was intended merely to harass or injure the other party; or (3) the suit was frivolous as not reasonably founded in fact or was interposed merely for delay or other improper purpose. While the statutory goal is to curb frivolous lawsuits, this statute has been in existence in similar form since 1988, but courts rarely grant requests to impose sanctions.

Plaintiffs in medical malpractice actions will no longer be allowed in most cases to pursue non-economic damages, such as pain and suffering, over $350,000. That limit does not apply if the defendant’s conduct was willful, wanton, or grossly negligent. A defendant’s destruction of medical records related to the case will also vitiate the limit on non-economic damages.

To encourage resolution of professional malpractice disputes without protracted litigation, the Act requires plaintiffs suing medical doctors and many other professionals to file a Notice of Intent to Sue, along with the expert affidavit specifying at least one act of negligence. The parties must then participate in a mediation in an attempt to resolve the dispute before the suit is filed. This provision applies to suits against accountants, lawyers, professional engineers, and other professionals as well as medical doctors.

 

Other miscellaneous provisions of the Tort Reform Act include:

Abolishing joint and several liability for a defendant whose conduct is determined to be less than fifty percent of the total fault;

Shortening the statute of limitations from thirteen (13) to eight (8) years for construction defect cases; and

Tightening rules for attorney advertising by restricting the use of a nickname that creates an unreasonable expectation of results.

 

The Act applies to all causes of action arising on or after July 1, 2005.