The South Carolina Fairness in Civil Justice Act of 2011

Recent Update to South Carolina Law!
by: Blake Godwin, Joe Morahan, and Caroline Lindsey

On June 14, 2011, South Carolina Governor Nikki Haley signed into law the South Carolina Fairness in Civil Justice Act of 2011. This Act concerns several important changes to South Carolina law, including a cap on punitive damages in certain situations. It also establishes an appeal bond cap, requires the attorney general to approve civil actions by circuit solicitors and requires disclosure of insurance policy limits for personal auto policies in accident cases. Below is a summary of the punitive damages cap.

Punitive Damages Cap

First, the Act amends Chapter 32, Title 15 of the 1976 Code by adding Article 5 regarding punitive damages, limiting the instances of punitive damages in some ways but expanding their availability in others.

Under the Act, punitive damages may only be considered by the jury if compensatory or nominal damages have been awarded at trial. Punitive damages will be awarded only if the plaintiff seeking them can prove by clear and convincing evidence that the harm they suffered resulted because of the defendant’s willful, wanton, or reckless conduct. To be eligible for consideration of punitive damages, the plaintiff must explicitly seek punitive damages in its complaint to the court for relief. The plaintiff must do so by stating only that the plaintiff is seeking punitive damages, and not stating an amount of punitive damages.

Once a court determines that the particular plaintiff is eligible for consideration of punitive damages, the trial will be split into two stages. The first stage of this bifurcated trial will determine the liability and any compensatory or nominal damages to be awarded. If compensatory or nominal damages were awarded in the first stage, then in the second stage the jury will consider if the defendant is liable for punitive damages.
There are three levels of punitive damages depending on the severity of the conduct leading to the harm: a level of no more than three times (3x) the amount of compensatory damages or five hundred thousand dollars ($500,000), a level of four times (4x) the amount of compensatory damages or two million dollars ($2,000,000), and finally, no cap on punitive damages.

First level:

In determining the amount of punitive damages to be awarded, the jury must consider all relevant evidence, including the following factors:

 The defendant’s degree of guilt,
 The severity of harm caused,
 If and how much the plaintiff contributed to the harm,
 The duration of the conduct,
 If the defendant was aware or concealed its conduct,
 If there was any similar conduct in the past,
 How much the defendant profited from the conduct,
 The defendant’s ability to pay, and
 The likelihood that the punitive damages will deter the defendant or others from similar conduct.

A punitive damage award must not exceed the greater of three times the amount of compensatory damages or $500,000; unless, the elements for levels two and three are satisfied.

Second level:

If the court determines either of the following two factors are present in the defendant’s conduct, then the punitive damages may be no more than four times the amount of compensatory damages or $2,000,000:

 The wrongful conduct was driven primarily by unreasonable financial gain and that the unreasonably dangerous nature of the conduct plus the high likelihood of injury resulting from the conduct, was approved by an agent, director, officer, or other responsible person, or

 The defendant’s actions could subject the defendant to conviction of a felony and that action of felony was the proximate cause of the plaintiff’s damages.

Third level:

Finally, if the court determines that any one of the following factors are present, then there is no cap on the punitive damage award:

 The plaintiff’s harm was intentionally caused by the defendant’s acts; or
 The defendant has pled guilty or has been convicted of a felony involving the same act or conduct complained of by the plaintiff, and that act or conduct is a proximate cause of the plaintiff’s damages; or
 The defendant acted or failed to act while under the influence of alcohol, illegal non-prescribed drugs, or any other toxic vapor to the degree that it substantially impaired the defendant’s judgment.

For more information on this hot topic or other related legal issues, please contact Anderson Jones, PLLC Attorney, Caroline Lindsey at (919) 277-2541 or by email!