|
It’s impossible to
sit quietly while lawsuit reform opponents contend to all who
will listen that tort reforms passed by the South Carolina
General Assembly in 2005 favor big corporations at the expense
of the little guys. To the contrary, it’s something that small
businesses have lobbied for, right alongside the BMWs and
Michelins of the state, for nearly three years.
According to the
National Federation of Independent Businesses (NFIB), 89.5
percent of NFIB members who responded to a recent poll supported
the complete elimination of joint and several liability, known
as the “deep pockets” rule. They also favored eradicating “venue
shopping” in which plaintiff attorneys seek out trial
jurisdictions historically friendly to their clients. In
addition, 92.5 percent of NFIB members in the poll supported
setting reasonable limits on “pain and suffering” damage awards.
More than 80 percent
of South Carolina Chamber of Commerce members are small
businesses. They are the engine of this state’s economy and a
major reason Chamber sentiment so closely aligns with that of
NFIB and other organizations that advocate for small businesses.
It would be exceptionally naïve not to recognize the critical
role small businesses play in our economy.
The South Carolina
bill recently signed into law specifies that lawsuits must be
filed in the county in which an injury occurred or where the
defendant lives or does business. This eliminates that notorious
venue shopping. The bill reduces the number of years in which a
homeowner can sue for substandard construction from 13 years to
eight, and it imposes sanctions against those who file overtly
frivolous lawsuits or motions.
Despite the South
Carolina Chamber’s efforts, the final bill did not completely
abolish joint and several liability, a policy that allows
collection of an entire damage award from just one of several
defendants because that defendant has the greatest ability to
pay, regardless of degree of actual culpability. However, it did
establish a 50 percent threshold so that defendants who are less
than 50 percent responsible for an injury would not have to pay
all of the award. That’s significant progress.
Now you’d be
surprised how many small businesses are targeted for “deep
pockets” due the perception that they are powerful,
abstract entities compared with their otherwise sympathetic,
non-affluent, living and breathing co-defendants. More than half
(59 percent) of small business survey respondents indicated they
have been threatened with a lawsuit over the past five years,
and 41 percent said they have, in fact, been sued. It’s
estimated that small business owners are nine times more likely
to be sued than they are to sue. Clearly, tort reform has not
been just a “big business” issue.
We also can’t forget
the larger economic perspective that goes far beyond internal
coffers. For years, much of the commercial world has bypassed
investment in South Carolina because of its unfriendly tort
climate – the 11th worst in the nation. That has
severely inhibited our ability to compete in the global
marketplace. Harvard economist Michael Porter introduced us to
the concept of clustering to maximize our competitive advantage
and grow the knowledge economy. His model, which our
organization has embraced as part of its mission, recognizes the
basic interdependence of businesses of all sizes in vast
commercial ecosystems.
Quite simply, the
giants cannot succeed without the little guys. They are the
peripheral service providers, the suppliers, the laborers, and
the consultants – the quintessential road-builders that make the
giants’ existence possible. They are the infrastructure, and
without them, in relatively close proximity, the state or
regional ecosystem becomes frail.
A healthy business
ecosystem supports growth, innovation, and higher-paying,
knowledge-based jobs. Small businesses generate nearly seven out
of every 10 jobs in South Carolina. Because of the
interdependence of all businesses, their role is paramount in
our journey toward prosperity in terms of jobs and wealth
creation. So, you see, mom-&-pop businesses have just as
compelling, if not a more vested, interest in tort policy as the
proverbial corporate behemoths. The passage of tort reform is a
one-size-fits-all boon to economic development in this state.
|
