The S.C. Senate Tuesday passed a bill to nearly double the.
The vote followed months of behind-the-scenes negotiations between some senators who fought for even bigger payouts to victims and other senators who said increasing the government’s legal liability will raise insurance rates, thereby forcing cities, counties and state agencies to raise taxes or cut services.
“This is a little bit higher than what I wanted it to be, but I know it’s a good bit less than what some other people wanted it to be,” Senate Majority Leader Shane Massey, R-Edgefield, said in announcing the compromise on.
Under current S.C. law, a victim in an accident caused by the government — say, a person injured in a wreck caused by a neglected pothole — can sue for only $300,000.
Groups of people hurt or killed by government negligence — such as children on an aging school bus that catches fire — would have to share a maximum payout of $600,000.
Critics, including trial lawyers, argue those caps, which haven’t been adjusted in 20 years, are outdated and insufficient to pay medical bills or funeral costs in 2019, much less compensate victims or their families for their losses.
Trial attorneys also have complained the low caps encourage the state’s insurance agency, the Insurance Reserve Fund, to lowball settlement offers to victims.
“In my view, there shouldn’t be any caps,” said state Sen. Marlon Kimpson, a Charleston Democrat and trial attorney.
But other senators, including Massey, said raising the caps too much would cause insurance premiums to spike for state agencies, cities, counties, fire departments and school districts — leading them to either raise taxes or cut services. Massey is an attorney who has represented government agencies in liability cases.
After a compromise last month, the Senate voted to lift those caps to $500,000 per victim and $1 million per incident. The original bill, filed by state Sen. Gerald Malloy, a Darlington Democrat and trial attorney, would have raised the caps to $1 million per victim and $2 million per incident.
Senators also agreed — some begrudgingly — to remove part of the bill that would have tied the caps to the Consumer Price Index, allowing them to rise with inflation. The failed provision, Massey said, would have amounted to voting for an annual tax increase.
The bill now heads to the S.C. House, which hasn’t debated the idea this year.
If passed, the current proposal would cost S.C. counties that buy their insurance through the state Insurance Reserve Fund roughly $1 million more per year, while cities insured by the Fund could see their premiums rise as much as $3.9 million per year, according to a fiscal analysis by the S.C. Revenue and Fiscal Affairs Office.
State economists could not yet estimate how much premiums would rise for state agencies insured by state’s insurance fund, or for cities, counties, schools and hospitals that buy insurance elsewhere.