If there’s one thing that everyone involved in South Carolina’s liquor liability debate seems to agree on, it’s that bar and restaurant owners need fast relief from the sky-high insurance rates that are putting too many of them out of business.
“Small businesses are struggling while politicians dither,” said Democratic S.C. Sen. Ed Sutton, whose Charleston district contains more bars and restaurants than any other in the state. “Every week that goes by, another VFW post or restaurant closes up shop because their premiums increased tenfold or more in the span of two years.”
Bar and restaurant owners, plaintiffs’ attorneys and lawmakers of both parties echoed those concerns in recent City Paper interviews.
“Last week, two places closed in Charleston and two closed in Greenville the week before,” said Christopher Smith, executive director of the S.C. Bar and Tavern Association. “It’s just a continuing trend across the state.”
But the definition of the problem is where the consensus ends — and where a series of difficult, divisive questions about judicial fairness, victims’ rights and the insurance industry’s opaque business practices begin.
Two bills currently being debated in the S.C. Senate, each of which aims to reduce liquor liability premiums, bring those questions into sharp relief.
Lawsuit reform
Introduced by S.C. Sen. Majority Leader Shane Massey (R-Edgefield), S. 244 is a broad lawsuit reform bill, also known as a “tort reform” measure, that supporters argue would bring down liquor liability rates by ensuring insurance companies pay for only the harm their client directly caused.
Under current law, defendants in civil suits can be required to pay 100% of the damages if a jury finds they are responsible for more than 50% of the harm – or in the case of businesses selling alcohol, as little as 1%. In other words, if a bar were to be found to just have 1% of the liability in a case, it could – at least in theory – face paying all of the damages for the case.
Experts say the law was designed to ensure that victims — in liquor liability cases, usually drunk driving victims or their survivors — receive their full jury award when some responsible parties can’t afford to pay.
“It’s not fair for an injured person not to be able to recover 100% of his damages,” Massey said in a Feb. 6 Senate Judiciary Committee hearing. “But the current law allows for one party to be 100% responsible even if we acknowledge that he didn’t cause all 100% — and that’s not fair either.”
A recent poll of South Carolina residents conducted by the conservative-leaning S.C. Policy Council found that a majority of state residents — 63% — support Massey’s lawsuit-reform approach in concept.
But Rep. Gil Gatch (R-Dorchester), a civil litigator who represents clients who’ve been harmed by drunk drivers, argues Massey’s bill would just flip the system’s unfairness from a wrongdoer’s insurance company onto the victim.
“What about the single mom who’s in a car accident with her kid and there’s a catastrophic injury, and because of tort reform their percent is being drastically reduced?” Gatch said. “This is about right and wrong, and it’s about standing up to these big corporate interests that want protection from having to pay out damages to people who’ve been injured.”
Moreover, he argues, tort reform has failed to bring down insurance rates in other places.
“In Louisiana, the insurance companies promised the legislature and the governor they’d bring down rates with this kind of legislation and it didn’t happen,” Gatch said. “So there’s no guarantee whatsoever that this will reduce premiums. They can just do whatever they want.”
A narrower alternative
The second bill under consideration in the Senate, S. 184, is much narrower, and perhaps as a result, enjoys at least lukewarm support from all groups involved.
Rather than overhauling the entire tort system, the so-called “dram shop” legislation, of which Sutton is a cosponsor, would set clear guidelines for when a bar or restaurant could be held responsible for overserving a patron who later caused a collision behind the wheel. In other words, this proposal would focus on liabilities of places that serve alcohol, not any lawsuit involving liability, such as construction defects or medical malpractice.
In particular, it would require plaintiffs to prove the customer was “visibly” intoxicated at the time of service, or that the bar “knew or should have known” he was intoxicated based on the number of drinks it had served the person.
But as with the lawsuit reform bill, there’s uncertainty about whether it would actually bring down rates due to the opacity of insurance company standards.
“We absolutely support it,” the Bar and Tavern Association’s Smith said on Feb. 11. “But do we think it goes far enough? Not necessarily.”
At the Feb. 6 hearing, Sydney Lynn, president of the S.C. Association for Justice, which represents trial lawyers, noted that the narrower S. 184 would be strengthened by clearer definitions of its terms.
“I think we need to come up with what ‘visibly intoxicated’ means,” Lynn said. “How many drinks have they had? What’s their body type? How long have they been there? I think we could hammer that out.”
And then she raised the issue that some say should be at the center of the debate in the state with the highest number of driving-under-the-influence (DUI) deaths per capita.
“What this conversation really leads to is, we need stronger DUI laws,” Lynn said. “We need a more deliberate deterrent to discourage folks from getting behind the wheel.”
A stronger DUI law
After years of failed efforts to strengthen the state’s DUI law, advocates like S.C. Mothers Against Drunk Driving (MADD) President Steven Burritt say a new Senate bill (S. 52) could make a real difference, for victims and bar owners alike.
“Senate Bill 52 is a comprehensive set of DUI reforms that we endorse and think would be very positive,” Burritt said. “And I’m encouraged that that issue has repeatedly been a part of this year’s discussions [about liquor liability].”
Unlike some approaches, advocates argue, DUI reform would go directly to the heart of the problem with expensive insurance against the harms caused by drunk drivers.
“You can’t quantify it, but just the numbers say we have so many of these lawsuits because, sadly, we are number one per capita in drunk driving deaths,” Burritt said. “We’d love to see all this energy [around liquor liability] go into fixing our very broken DUI laws.”
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